If a Department in a Grocery Store Is Under Consideration

question 15

Multiple Choice

If a department in a grocery store is under consideration to be eliminated,which of the following cost(s) is(are) NOT relevant to the decision?

• A) avoidable fixed expenses
• B) unavoidable costs
• C) common costs
• D) B and C

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Definitions:

Extending Credit

The act of allowing a buyer to purchase goods or services now and pay for them later, typically involving terms and conditions regarding repayment.

Cash Flow

The total amount of money being transferred into and out of a business, particularly in terms of liquidity and financial planning.

Cash Discount

A reduction in the invoice price offered by sellers to encourage early payment by buyers.

Carrying Costs

Expenses incurred for holding inventory over a period, which can include financial costs, storage fees, and loss due to obsolescence.