Lipton Makes Several Easy-To-Prepare Side Dishes All Using Macaroni Shells

question 58

Multiple Choice

Lipton makes several easy-to-prepare side dishes all using macaroni shells.In promoting this product line,Lipton offers a 50-cents-off coupon that can be used for any of its macaroni-based mixes.Therefore,Lipton must consider _____ when pricing its mixes.

• A) joint costs
• B) differential costs
• C) bundling costs
• D) potential (or basing)costs
• E) factorial costs

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Definitions:

Reversing Entries

Entries made in accounting to reverse or cancel out adjusting entries made at the end of a reporting period, often used to simplify recordkeeping.

External Transactions

Financial transactions between a business and an outside party, which can include buying from or selling to another company.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends, but rather kept by the company for reinvestment in its operations or to pay debt.

Closing Process

The accounting procedures used to close out business accounts at the end of an accounting period.