Which of the following is most likely a drawback of contract manufacturing?
A) There are low chances of quickly starting the process.
B) There is decreased control over the manufacturing process.
C) There are significant political and economic risks involved.
D) There is little opportunity of later forming a partnership.
E) There is no possibility of buying out the local manufacturer.
B
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Which of the following is true of services and their providers?
A) Service providers are more capital-intensive than labor-intensive. B) The quality of the service experience is controlled by a service contact employee. C) Service experience is usually constant irrespective of the person delivering or receiving it. D) Services can be provided in an isolated environment, away from customers. E) The degree of variation of inputs and outputs is negligible for services.
In Year 1, Costello Company performed work for a customer and billed the customer $10,000. In Year 2, the customer pays Costello Company for the services it rendered in Year 1. In Year 1, the company incurred $3,000 of wage expense, but it did not pay the employees until Year 2. If Costello Company uses the cash-basis of accounting, then it will report
A) revenue of $10,000 and expense of $3,000 in Year 2. B) revenue of $10,000 in Year 1 and expense of $3,000 in Year 2. C) no revenue or expenses in either year. D) revenue of $10,000 and expense of $3,000 in Year 1. E) revenue of $10,000 in in Year 2 and expense of $3,000 in Year 1.