The Practice of "Selling" Large Quantities of Goods to Customers

question 53

Multiple Choice

The practice of "selling" large quantities of goods to customers in order to get quarterly sales up while allowing these customers to return the goods next quarter is termed ________.

• A) channel stuffing
• B) clogging the network
• C) spamming the johns
• D) artificial sales

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Definitions:

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase profitability through its fixed costs structure.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Sales

The total revenue generated from goods or services sold by a company.

Product Costs

Costs that are assignable to the production of goods, including direct materials, direct labor, and manufacturing overhead.