Frozen Cow Ice Cream Company buys sugar and milk to produce ice cream and energy drinks.At the end of a quarter,both its inventory of sugar and its inventory of energy drinks has increased,but their inventory of milk has decreased.Investment for the quarter will include ________.

Question

Quizplus · Accepted Answer

The investment for the quarter would be the total cost of the increased inventory of sugar and energy drinks, minus the cost of the decreased inventory of milk, since all three items are used in the production process. Option A gives the correct calculation for this. Option B is incomplete as it only takes into account two out of the three changes in inventory. Option C is incorrect as it only includes one out of the three changes in inventory. Option D is incorrect as there are clear changes in inventory that affect the company's investment.

Frozen Cow Ice Cream Company Buys Sugar and Milk to Produce