A noted accountant once remarked that the optimal number of faulty TV sets for the XYZ Electric Co. Ltd. to sell is "not zero," even if XYZ promises to repair all faulty XYZ sets that break down, for whatever reason, within two years of purchase. The optimal number would be "not zero" because None of the other alternatives are correct The repair costs are tax deductible It is cheaper (and, therefore more profitable) to repair a few sets than to have such stringent quality control that no defects result All the three statements about faulty TV sets are correct Zero defects could not
A noted accountant once remarked that the optimal number of faulty TV sets for the XYZ Electric Co. Ltd. to sell is "not zero," even if XYZ promises to repair all faulty XYZ sets that break down, for whatever reason, within two years of purchase. The optimal number would be "not zero" because None of the other alternatives are correct The repair costs are tax deductible It is cheaper (and, therefore more profitable) to repair a few sets than to have such stringent quality control that no defects result All the three statements about faulty TV sets are correct Zero defects could not
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 10Q
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A noted accountant once remarked that the optimal number of faulty TV sets for the XYZ Electric Co. Ltd. to sell is "not zero," even if XYZ promises to repair all faulty XYZ sets that break down, for whatever reason, within two years of purchase. The optimal number would be "not zero" because
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None of the other alternatives are correct
-
The repair costs are tax deductible
-
It is cheaper (and, therefore more profitable) to repair a few sets than to have such stringent quality control that no defects result
-
All the three statements about faulty TV sets are correct
-
Zero defects could not be accounted for and hence the accounting system could not capture the information to better plan future production
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