To Increase the Margin Between Selling Price and Manufacturing Cost

question 54

Multiple Choice

To increase the margin between selling price and manufacturing cost, a manufacturing company might:

• A)negotiate a lower purchase price with suppliers of raw materials.
• B)substitute more efficient manufacturing equipment for work now done by employees.
• C)increase selling prices.
• D)all of the above
• E)none of the above

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Definitions:

Amortization

The process of spreading out a loan's payments over time, often relating to intangible assets as well.

Boot

A non-cash item given or received in a transaction to even out the value exchange, commonly used in the context of trade or real estate deals.

Similar Asset

An asset that has comparable characteristics and functionality to another asset, often considered when evaluating replacements or equivalents.

Trade-In Allowance

The amount a seller allows a buyer for a fixed asset that is traded in for a similar asset.