Answer the Following Question(s)using the Information Below

question 61

Multiple Choice

Answer the following question(s) using the information below.Southwestern College is planning to hold a fund raising banquet at one of the local country clubs.It has two options for the banquet:
Southwestern College has budgeted $1,800 for administrative and marketing expenses.It plans to hire a band which will cost another $800.Tickets are expected to be $30 per person.Local business supporters will donate any other items required for the event.
-Mrs.Tisdale is going to sell Christmas tree lights for $40 a box.The lights cost Mrs.Tisdale $10 a box and any unsold lights can be returned for a full refund.She is planning to rent a booth at the upcoming Happy Holidays Convention, which offers three options: Which of the following statements is FALSE?

• A)Her decision will determine the risk she faces.
• B)Contribution margin will vary depending upon the option chosen.
• C)One of the options will allow Mrs.Tisdale to break even, even if she doesn't sell any lights.
• D)Operating income will always be the greatest for Option 3.
• E)Option 3 has the lowest operating leverage.

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Definitions:

Management's Responsibility

The obligation of an organization's management to ensure accurate and complete financial reporting, adherence to laws and regulations, and effective operation of the entity.

Primary User Groups

The main categories of users who rely on a company's financial information, typically including investors, creditors, and regulatory agencies.

Financial Information

Data pertaining to the financial status or operations of a business, including balance sheets, income statements, and cash flow statements.

Constraints

Limitations or restrictions that can affect the course of action or outcomes in a specific situation.