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ABC manufactures vehicle engines and purchases components from a supplier Each engine requires one component costing $10 each ABC's supplier otters a 5% volume discount which has always been taken, this reduces the cost to $9.50 each. However, ABC has recorded the cost as $10 throughout the accounting system
Once the correct price is recorded, what will be the effect on the factory costs incurred and the gross profit margin (GP%)?
A)
B)
C)
D)
Suggested Answer: D
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7 comments · newest first
SE
Selma
12 months ago
This is a classic accounting mistake, they need to fix that!
WI
Winfred
1 year ago
Wait, are they really recording it as $10? That seems off.
HE
Herschel
1 year ago
I think it might affect the gross profit margin too.
VA
Valentine
1 year ago
Totally agree, that will lower the factory costs!
RA
Rashida
1 year ago
The component cost is actually $9.50 after the discount.
GU
Gussie
1 year ago
I'm feeling pretty confident about this one. The highest mitigation with the budget constraint points to option B. Enabling host build reserve and a 4-node vSAN cluster seems like the best approach.
CL
Claudia
1 year ago
I'm pretty confident the answer is B. The question is about a checkout requirement, so the Checkout Preferences module is the most likely place to find the setting to disable a credit card type.