Which of the Following Would Not Be a Short-Run Operating

question 23

Multiple Choice

Which of the following would not be a short-run operating activity or decision?

• A) Buying raw materials with cash or bank loan.
• B) Selling product on credit.
• C) Increasing inventory safety stock.
• D) Investing a new process machine.

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Definitions:

Gross Margin

The difference between revenue and cost of goods sold, divided by revenue, representing the percentage of each dollar of revenue that the company retains as gross profit.

Traditional Format

A conventional method of financial reporting where costs are classified by function (e.g., cost of goods sold, operating expenses) rather than by behavior.

Gross Margin

The difference between sales revenue and the cost of goods sold, showing the profitability of a company's core activities.

Net Operating Income

represents the profit a company makes from its normal business operations, excluding non-operating income and expenses.