During the Planning Process, If There Is a Gap Between

question 20

Essay

During the planning process, if there is a gap between future desired sales and projected sales, corporate management will need to develop or acquire new businesses to fill it. Identify and describe the three strategies that can be used to fill the strategic gap.

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Definitions:

Fixed Cost

Costs that do not vary with the level of output or production, such as rent, salaries, and insurance premiums.

Activity Level

A measure of the volume of production or operations, often used to plan and control various business activities.

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred.

Average Costs

The cost per unit calculated by dividing the total cost of production by the number of units produced.