Scenario A

question 14

Multiple Choice

Scenario A.Marla's Basement is a small retail store that specializes in antique figurines and decorative knickknacks.In analyzing the environment,Marla has uncovered the following interesting findings:
1.Marla has recently purchased more inventory than in the past.The people from whom she buys are selling off more knickknacks because their children are not interested in this type of decorative items and they would prefer to liquidate unnecessary household items to help them with their daily expenses.
2.Marla discovered that her business is in a historical preservation district.As she considers remodeling the shop,she realized that she must pay attention to the guidelines set forth in the governing laws.
3.Marla's buyer-customer base seems to be changing.The tastes of the younger generation near her shop are shifting to modern decor,so the customer base to which she sells is shrinking.
4.Marla has been told that she should consider selling her inventory via the Internet,but she does not own (or understand how to use) a computer.
5.In reading a survey of regional business,Marla discovered that there are no other antique knickknack stores within 200 miles.
-Which of the following elements of the macroenvironment is most closely associated with the findings about the historical preservation district?

• A)laws and regulations
• B)the economy
• C)demographics
• D)technology
• E)the natural environment

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold based on the average cost of all items available for sale during the period.

Cost Reconciliation

Cost reconciliation is the process of analyzing and adjusting the differences between the actual costs incurred and the standard or budgeted costs to understand variances in manufacturing or production activities.

Process Costing

Process costing is a method of costing used by companies that produce similar or homogenous products, where costs are accumulated over a period and then allocated to units of product.

Weighted-Average Method

An inventory costing method that assigns an average cost to each unit of inventory, calculated by dividing the total cost of goods available for sale by the total units available.