Competitive pressures have caused service providers (who typically have a large variable portion of their total costs) to:
A. cut costs wherever possible.
B. calculate the break-even point and determine the potential profit at different levels of sales.
C. incur losses in the short run with the goal of raising prices later.
D. establish service facilities in low cost countries.
E. establish production facilities in low cost countries.
Ans: A. cut costs wherever possible.
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Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business?
a. The gain or loss on disposal should be reported as an extraordinary item. b. Results of operations of a discontinued component should be disclosed immediately below extraordinary items. c. Earnings per share from both continuing operations and net income should be disclosed on the face of the income statement. d. The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations.
How is McDonald's thinking strategically about cutting costs by $300 million by 2017?
a. Lowering the quality of its food b. Franchising 90% of the restaurants c. Raising its prices by 2% d. Offering fewer items on the menu