Which of the Following Is the Best Reason for Continuing

question 9

Multiple Choice

Which of the following is the best reason for continuing to carry a product when a sales volume analysis indicates it is a low-volume item?

• A)The item is needed to round out the company's product line.
• B)The product accounts for 5 percent of the sales volume and 2 percent of the profit.
• C)The primary demand for the product is declining.
• D)The product's gross margin is also low.
• E)The product was what gave the company its start in life.

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Definitions:

Total Current Assets

These are all the assets of a company that are expected to be sold, consumed, used, or converted into cash within one year or within the business's normal operating cycle.

Statement of Cash Flows

A financial report detailing the impact of variations in balance sheet accounts and income on cash and cash equivalents, segmented into operating, investing, and financing activities.

Accounts Receivable

Accounts receivable is the amount of money owed to a company for goods or services it has sold on credit.

Earnings Per Share

A financial metric indicating the portion of a company's profit allocated to each outstanding share of common stock, calculated as net income divided by the number of shares.