How Does Seasonality Create Fluctuations in a Firm's Net Income

question 45

Multiple Choice

How does seasonality create fluctuations in a firm's net income over a year?

• A) Cost of goods sold will rise and fall along with sales, while administrative and other costs will remain relatively steady.
• B) Cost of goods sold will rise when sales fall, and vice versa, while administrative and other costs will remain relatively steady.
• C) Cost of goods sold, along with administrative and other costs, will rise when sales fall, and vice versa.
• D) Cost of goods sold, along with administrative and other costs, will rise and fall along with sales.

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Definitions:

Order Cycle

The complete process or timeframe from the moment an order is placed until it is delivered, including order processing, manufacturing, and shipping stages.

Prints Tickets

The process of producing tickets for events, transportation, or other purposes, typically involving specialized printing technology.

Warehouse Workers

Individuals employed in a warehouse to handle tasks such as stocking, order picking, and packing, ensuring the smooth flow of goods.

Customer Information

Data and insights related to customers, including demographics, purchase history, behavior patterns, and preferences, used by businesses to tailor products, services, and marketing efforts.