Which of the Following Is Not a Reason Management Might

question 31

Multiple Choice

Which of the following is not a reason management might be tempted to classify costs as product costs rather than expensing them during periods in which production exceeds sales?

• A) The company's bank may be more likely to extend financing to the firm.
• B) Income taxes will be lower.
• C) Net income will be higher.
• D) Management bonuses may be higher.

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Definitions:

Payoff Table

A decision-making tool used in statistics and business to show the expected outcomes of different decisions under various states of nature.

Decision Matrix

A tool used in decision-making to evaluate and prioritize a list of alternatives or options, based on a set of criteria.

Payback Period Matrix

A conceptual tool used in finance to evaluate the time required for an investment to return its initial cost, considering various scenarios or criteria.

Payoff Table

A table used in decision making to show the possible outcomes or payoffs for different decisions under various states of nature.