Managers of a Discount Store Chain Are Considering Whether to Add

question 75

Multiple Choice

Managers of a discount store chain are considering whether to add a new auto service department.In reaching this decision,the managers should consider:

• A) Direct costs only.
• B) Both direct and indirect costs.
• C) Neither direct nor indirect costs.
• D) Indirect costs but not direct costs.

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Definitions:

Dividends Paid

The portion of a company's earnings distributed to shareholders as a reward for their investment.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, resulting in net profit or loss.

Unrealized Loss

A loss that results from holding onto an asset that has decreased in price, not realized until the asset is sold for a lower price.

Outstanding Voting Shares

The number of shares that are currently held by shareholders that grant them the right to vote on company matters.