The term "cannibalization" refers to ________
A) decrease in the sales of current project caused by the launching of new project
B) decrease in the sunk cost caused by launching of new project
C) decrease in overhead expenses incurred due to launch of new project
D) cost of using a resource for the best value it could provide in its best alternative
Answer: A
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Which of the following risks is related to efficiency of testing?
A. The risk of incorrect acceptance. B. Inherent risk. C. The risk of incorrect rejection. D. None of these.
Pierce Ice Cream Company operates several ice cream shops across the United States. The company has plans to expand the number of shops during the coming year. This planned expansion will require a large bank loan. During the past 5 years, some periods
were more profitable than others, and the President of Pierce has suggested to the company accountant that the depreciation and inventory valuation methods should be changed frequently. This change would allow the company to create the appearance that earnings were very consistent over the years. Discuss the merits of the President's suggestion regarding the financial statements.
In a multiple-product firm, the product that has the highest contribution margin per unit will
a. generate more profit for each $1 of sales than the other products. b. have the highest contribution margin ratio. c. generate the most profit for each unit sold. d. have the lowest variable costs per unit.
Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?
A) appropriation of retained earnings B) acquisition of treasury stock C) declaration of stock dividends D) issuance of long-term debt