Imagine a Confectionary Company Has Introduced a New Nutty Candy

question 173

Multiple Choice

Imagine a confectionary company has introduced a new nutty candy bar during the 1930s (the sales era in U.S.business history) .Which of the following statements would you MOST LIKELY expect management to make if sales of this new candy bar were much lower than expected?

• A)"We'd better do some market testing to determine why people are dissatisfied."
• B)"Perhaps we should make candy bars with raisins."
• C)"Let's put more aggressive salespeople in the field."
• D)"Let's lower the price and change the name."
• E)"Don't worry about it;we're the largest candy manufacturer in the area.Sooner or later they'll get hungry enough that they'll come to us."

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Definitions:

Inventory Costing

Inventory costing is the method used to assign costs to inventory items, determining the cost of goods sold and remaining inventory value.

Average Cost Formula

A method for determining the cost of inventory by dividing the total cost of goods available for sale by the total number of units available for sale.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, after accounting for sales and purchases during the period.

FIFO

"First In, First Out," an inventory valuation method where goods first bought are the first ones sold, affecting the cost of goods sold and inventory on financial statements.