Companies have used a variety of tactics to combat higher prices for ingredients including shrinking package sizes. Oreo cookies are one of the world's best selling cookies in the world ($4B sales, 40 billion cookies, sold in 100 countries).

The creme inside the cookie is a big deal to the user experience, taste, and quality sentiment to the consumer.

Based on your understanding of cost behavior and management decision making with accounting related data, which answer is LEAST correct:

Question

Companies have used a variety of tactics to combat higher prices for ingredients including shrinking package sizes.  Oreo cookies are one of the world's best selling cookies in the world ($4B sales, 40 billion cookies, sold in 100 countries).

The creme inside the cookie is a big deal to the user experience, taste, and quality sentiment to the consumer.

Based on your understanding of cost behavior and management decision making with accounting related data, which answer is LEAST correct:

BlackTom AI · Accepted Answer

This question asks us to evaluate statements about cost behavior and management decision making in the context of Oreo cookies and their creme filling, focusing on which statement is least correct.
Option 1: 'the creme in the cookie is a variable cost and could lower the cost of the cookie if less quantity is used in each cookie' In cost accounting, the amount of creme per cookie would typically vary with the number of cookies produced, making it a variable cost. If production teams reduce creme quantity per cookie, the variable cost per unit would fall, which could lower the cost to produce each cookie. This aligns with standard cost behavior concepts where ingredients tied directly to product output behave as variable costs.
Option 2: 'the creme in the cookie is a fixed cost that benefits from volume of cookies shipped' A fixed cost is defined as a cost that does not change with the level of production or sales within a relevant range. Creme per cookie, if tied directly to the number of cookies produced, would not be fixed; it would vary with output. The phrase 'benefits from volume' is also misleading because fixed costs do not increase or decrease with volume; rather, their total amount remains constant, while fixed cost per unit declines with higher volumes. This statement conflicts with fundamental cost behavior concepts and is therefore incorrect.
Option 3: 'marketing is a discretionary fixed cost that could be used through campaigns to thwart negative comments on the matter' Marketing is commonly treated as a discretionary fixed cost in many cost classifications, meaning management can alter or delay marketing expenditures at its discretion. Campaigns are often used to address public sentiment or negative commentary, making this statement reasonable within standard managerial accounting interpretations of discretionary fixed costs.
Option 4: 'cookies manufactured are considered inventory on the Balance Sheet' In accounting, finished goods ready for sale are indeed reported as inventory (specifically as finished goods inventory) on the Balance Sheet. This aligns with general accounting presentation for manufacturing companies. 
Overall, the statement that qualifi es as least correct is the one asserting creme is a fixed cost that benefits from volume, because creme per cookie is more accurately viewed as a variable cost tied to production output, not a fixed cost that scales with volume. The other statements either correctly describe variable costs, discretionary fixed costs, or inventory treatment, and are therefore more consistent with cost behavior and financial accounting concepts.

2025FA_IMC_402-0_SEC20 Final Exam

查看解析

登录即可查看完整答案

类似问题

Which of the following statement regarding cost is correct:

Which of the following statements is true?

Bonus Question: Commissions are considered fixed costs.

Variable costs are costs that:

The per-unit amount of three different production costs for Onini, Inc., are as follows: Cost A Cost B Cost C Production = 10,000 $ 20.00 $ 15.00 $ 12.00 Production = 40,000 $ 5.00 $ 11.25 $ 12.00 What type of cost are each of these three costs?

A fixed cost

A cost is $50,000 when 25,000 units are produced, and $100,000 when 50,000 units are produced. This is an example of a(n)

The relationship between cost and activity is known as:

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单