A Firm Whose Primary Business Is in a Line of Regional

question 72

Multiple Choice

A firm whose primary business is in a line of regional grocery stores would be most likely to have to include which of the following facts, if true, in the firm's management discussion and analysis (MD&A) ?

• A) that a large number of funds were allocated to advertising to increase awareness of the firm's brand in new areas it had expanded into this year
• B) that some senior members of the management team have retired in this financial year
• C) that the company has lost a class action suit brought against the firm by its employees and is expected to have to pay a large amount of damages
• D) that the firm has plans to expand into the organic food business in the next financial year by purchasing several small organic food retailers

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Definitions:

Machine-Hours

An indicator of the amount of work produced or activity level, determined by how many hours equipment is running.

Plantwide Predetermined Overhead Rate

A single overhead rate calculated by dividing total estimated manufacturing overhead costs by an estimated allocation base for the entire factory, often used in simpler costing systems.

Job-Order Costing System

An accounting system that assigns costs to specific jobs or batches of goods, typically used in manufacturing or service industries where each job is unique.

Direct Labor-Hours

A measurement of the time workers spend directly manufacturing a product, often used to allocate manufacturing overhead.