Ollie Has Developed a New Product for Radio That Allows

question 31

Essay

Ollie has developed a new product for radio that allows the listener to rewind and listen to songs or dialogue that was missed. The listener can then resume play in live mode, similar to a DVR product used on home TVs. Ollie knows his competitive advantage will dwindle over time as new technology emerges. What can he do to secure the future of his product and himself as an innovator?

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Definitions:

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies directly with production volume.

Variable Costing

Accounting practice that integrates only variable cost elements of production (direct materials, direct labor, and variable manufacturing overhead) into the valuation of products.

Net Operating Income

The total profit of a company derived from its normal business operations, excluding expenses and revenues from non-operating activities.

Unit Product Cost

The total cost (both variable and fixed) associated with producing one unit of product.