A Small Chain of Supermarkets in the Province of Manitoba

question 117

Multiple Choice

A small chain of supermarkets in the province of Manitoba sells only manufacturer's brands.Which of the following is one of the arguments you could have used to dissuade the supermarket chain owner from selling only manufacturer's brands?

• A) A well-known manufacturer's brand will not enhance the chain's image.
• B) Manufacturers rarely spend money advertising the brand name to consumers.
• C) Manufacturers typically offer a lower gross margin than could be earned on private label brands.
• D) Manufacturers force the chain to carry a large in-store inventory.
• E) Relying on the manufacturer or wholesaler to deliver a national brand quickly is optimistic at best.

---

Definitions:

Raw Materials

Basic materials that are used in the initial stages of the production process, before being transformed into finished products.

Inventory Accounts

Inventory accounts are accounting records that track the quantity and value of goods that a company holds for sale in the ordinary course of business.

Overhead Rates

Rates used to allocate overhead costs to products or service units, typically calculated by dividing total overhead costs by some base such as labor hours or machine hours.

Designer Hours

The amount of time spent by designers on a project, often considered for billing or costing purposes.