The Cat Box Acquired the Dog House

question 17

Multiple Choice

The Cat Box acquired The Dog House.As part of this transaction,both firms ceased to exist in their prior form and combined to create an all-new entity,Animal World.Which one of the following terms best describes this transaction?

• A)divestiture
• B)consolidation
• C)tender offer
• D)spinoff
• E)conglomeration

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Definitions:

Period Costs

Expenses that are not directly tied to the production process and are instead charged to expenses as incurred, typically administrative or selling expenses.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs related to producing goods or services.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, leading to its net income or loss.

Direct Labor Cost

Expenses directly attributable to the production of goods or services, including wages and salaries for workers who physically produce products.