A Company Normally Sells Its Product for $20 Per Unit

question 63

Multiple Choice

A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has now fallen to $13 per unit.What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

• A)$1,000.
• B)$1,400.
• C)$400.
• D)$600.
• E)$800.

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Definitions:

Risky Shift

Is the phenomenon where groups tend to make riskier decisions together than individuals would on their own, often attributed to the diffusion of responsibility.

Selective Perception

The process where individuals selectively interpret what they see based on their interests, background, experience, and attitudes.

Perceptual Bias

is the tendency for perception to be affected by recurring thoughts, beliefs, or attitudes, leading to distorted interpretations of information.

Attribution Bias

A cognitive bias that affects the way people deduce the causes of their own and others' behaviors, often attributing them incorrectly.