Choose the Correct Description of the Net Balance of Costs

question 74

Multiple Choice

Choose the correct description of the net balance of costs in excess of billings on long-term contracts. Assume only one current contract, and that contract price does not equal total estimated contract cost at the end of the current year.

• A) Under completed contract, the balance equals cost plus billings.
• B) Under completed contract, the balance equals total estimated profit less billings.
• C) Under percentage of completion, the balance equals cost to date less billings, if profit has been recognized.
• D) Under percentage of completion, the balance equals cost to date less billings, less total projected loss.

Comprehend the role of information flow in decision-making processes.

Examine the relationship between decision-making authority and organizational structure.

Evaluate methods to incentivize individuals for better performance in sales and operations.

Understand the differences in motivation between franchisees and salaried managers.

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Definitions:

Specialty Cake Shop

A bakery that focuses primarily on creating and selling unique or custom cakes for special occasions.

Baked Goods

Featured food products made from ingredients such as flour, sugar, and butter, that are typically cooked by baking.

Market Segmentation

The process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on shared characteristics.

Competitive Advantages

Unique attributes or circumstances that allow a company to outperform its competitors, such as cost structure, product quality, brand, or distribution network.