Use the Information for the Question(s)below

question 35

Multiple Choice

Use the information for the question(s) below.

-A florist is buying a number of motorbikes to expand its delivery service. These will cost $87 000, but are expected to increase profits by $3 000 per month over the next four years. What is the payback period in this case?

• A)29 months
• B)18 months
• C)12 months
• D)24 months

Recognize the importance of cost classification in management practices for service entities.

Identify commonalities and differences in the value chains of service firms and merchandising entities.

Understand overhead cost components in service firms and their implications on pricing and cost management.

Understand the importance of managing service costs in service businesses for monitoring efficiency and planning resource requirements.

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Definitions:

Experiments

Scientific procedures carried out to make a discovery, test a hypothesis, or demonstrate a known fact.

Causal Explanations

The identification of causes or reasons that explain why something happens or exists.

Descriptions

The act of giving a detailed account or explanation of something in words.

Validity

The extent to which a test, measurement, or research study accurately reflects or assesses the specific concept it is intended to measure.