Sales of a Producer's Wax Paper Food-Wrap Are Declining Fast

question 4

Multiple Choice

Sales of a producer's wax paper food-wrap are declining fast. The advertising manager--looking for a way to attract attention to the brand--suggests changing the package somewhat and promoting it as a "new" product. The Federal Trade Commission

• A) would allow the company to call the product "new" for only six months.
• B) probably would not approve of this at all.
• C) would allow the advertising campaign if it concluded that consumers thought the different package made it new.
• D) does not regulate advertising, so it would not pay any attention to this firm.
• E) None of the above is true.

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Definitions:

Equivalent Units

A term used in cost accounting to indicate a standard amount of work done on an incomplete unit, making it comparable to complete units.

Beginning Inventory

The value of goods available for sale at the start of an accounting period.

First-In, First-Out

An inventory valuation method where the goods purchased or produced first are sold or used first.

Equivalent Units

A metric used in cost accounting to express the amount of work done by manufacturers who have partially completed units on hand at the end of an accounting period.