Consider the Coke-Pepsi Photo Above

question 160

Multiple Choice

Consider the Coke-Pepsi photo above.What was the consequence to the Coca-Cola employee who tried to sell classified information to Pepsi?

• A)The employee was fired and no other legal action was taken since the practice is unfortunately too commonplace.
• B)The employee was given the choice of quitting or being demoted to a minimum wage job.
• C)The employee was arrested for bribery and sentenced to five years house arrest.
• D)The employee was sentenced to eight years in prison and ordered to pay $40,000 in restitution.
• E)The employee was permitted to keep her original job (minus any bonuses),but had to attend a seminar on ethical behavior.

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Definitions:

Contribution Margin

The difference between sales revenue and the variable costs associated with the production or sale of products or services. It's used to determine the ability of a business to cover its fixed costs.

Margin of Safety

This financial ratio measures the difference between actual or expected sales and the break-even point, indicating the cushion a company has before it incurs a loss.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behavior are valid.

High-low Method

A way to estimate the cost-behavior formula that uses the highest and lowest levels of activity to determine fixed and variable costs.