Kellogg's Has Several Cereals Targeted at Different Types of Users

question 41

Multiple Choice

Kellogg's has several cereals targeted at different types of users. This is an example of multiple products aimed at multiple markets. Manufacturing these different cereals is clearly more expensive than producing only one but seems worthwhile if it adds to the manufacturer's sales revenues and profits, doesn't reduce quality or increase price, and

• A)conforms to all FDA guidelines.
• B)uses the same promotion and packaging for all segments.
• C)decreases the cost of the physical plant.
• D)stabilizes competition.
• E)better serves customers' needs.

---

Definitions:

Reported Gain

The profit reported on financial statements, reflecting the difference between the sale price of an asset and its book value.

Equity Method

An accounting technique used to record investments in other companies, recognizing income proportional to ownership.

Consolidation

The process of combining the financial statements of separate but related entities into a single set of financial statements for the group.

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after adjusting for intercompany transactions, reported as a single figure.