Janine Buys Swimwear for Chain Store and While at a Recent

question 32

Multiple Choice

Janine buys swimwear for chain store and while at a recent trade show,she took the opportunity to meet with a few vendors.During one meeting a vendor that she normally purchases from each season,proposed a weekend in the Cayman Islands to view the swimwear that European tourists were wearing.Janine knows that it would be beneficial for trend direction to see what European tourists are wearing and then translate what she is seeing into her assortment for her target customer.Before she could further discuss this offer with the vendor,what should she do?

• A)be certain that all her work is completed before she leaves for an extended weekend
• B)inform her divisional merchandise manager of the proposal
• C)look at her budget to see how much product she would be able to purchase from this vendor this season
• D)see what other vendors might be offering
• E)check to see if there might be a better place than the Cayman Islands to scope out swimwear trends

Evaluate the conditions under which the U.S. dollar would be considered the functional currency for a subsidiary located outside the U.S.

Understand the different users of accounting information and the concepts of the business entity and monetary unit assumptions.

Comprehend the revenue recognition principle and its application in financial reporting.

Grasp the primary objectives of financial accounting and its relevance to external users.

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Definitions:

Step-Variable Cost

Costs that are fixed over a small range of activity but can change with significant changes in the volume of activity.

Sunk Cost

Expenses already incurred and which cannot be recovered, and should not be considered when making future business decisions.

Direct Manufacturing Cost

The sum of all costs directly tied to the production process, including direct labor and raw materials.

Manufacturing Overhead

Costs incurred in the production process that are not directly associated with individual units, including indirect materials, labor, and utilities, vital for operational continuity.