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AICPA Exam CPA-Business Topic 3 Question 97 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 97
Topic #: 3
[All CPA-Business Questions]

Long Lake Golf Course has raised green fees to a nine-hole game due to an increase in demand.

Which of the following is correct?

Show Suggested Answer Hide Answer
Suggested Answer: D

Choice 'd' is correct. Inspections. Inspections are part of order costs, not carrying costs.

Choices 'a' and 'c' are incorrect. Inventory carrying costs include all costs associated with warehousing (storing) inventory (e.g., storage, insurance, obsolescence, and spoilage associated with holding inventory).

Choice 'b' is incorrect. The economic cost of holding inventory includes the implicit (opportunity) cost of foregoing a return on the money invested in inventory.


by Marlon at Sep 13, 2024, 02:24 PM

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Fabiola
1 months ago
I'm going with D. It makes sense that the senior citizens would have a more inelastic demand since they may be on fixed incomes, while the weekend golfers have more flexibility in their schedules.
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Rozella
15 days ago
I agree with you, D seems like the most logical choice.
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Art
1 months ago
Ha! Looks like the golf course is trying to squeeze more money out of the players. I bet the senior citizens are not happy about the fee hike.
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Dell
9 days ago
D) The senior citizen demand is elastic and weekend demand is inelastic.
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Stefania
23 days ago
C) The senior citizen and weekend demand is inelastic.
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Deeanna
26 days ago
B) The regular weekday and weekend demand is elastic.
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Candida
1 months ago
A) The regular weekday and weekend demand is inelastic.
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Abel
2 months ago
That's an interesting point. Maybe the increase in green fees will affect different groups differently.
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Ettie
2 months ago
Hmm, I'm not sure. The question is a bit confusing. Maybe the senior citizens' demand is inelastic, but the weekend demand is elastic? I'll have to think about this one.
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Leonie
16 days ago
Hmm, I think you might be right. The weekend demand could be elastic.
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Tula
19 days ago
A) The regular weekday and weekend demand is inelastic.
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Lucille
2 months ago
I disagree, I believe the demand for senior citizen and weekend games is inelastic.
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Christiane
2 months ago
I think the answer is B. If the demand is inelastic, raising the green fees would not have increased revenue. The fact that they were able to raise the fees suggests the demand is elastic.
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Abel
2 months ago
I think the demand for regular weekday and weekend games is elastic.
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