Which of the Following Statements Is True

question 89

Multiple Choice

Which of the following statements is true?

• A)A good cost management system is a key consideration in determining an organization's mission.
• B)The organization's mission is a critical success factor in assessing how to react to competition.
• C)Knowledge of an organization's critical success factors help to clarify organizational mission and develop a cost management system.
• D)An organization must establish a position of cost leadership to compete in a global business environment.

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Definitions:

Output

The quantity of goods or services produced by a firm, industry, or economy within a certain period.

Per-Unit Cost

The cost associated with producing one unit of a product, calculated by dividing total production costs by the number of units produced.

Diseconomies of Scale

The situation where a company or business grows so large that the costs per unit increase, typically due to inefficiencies.

Economies of Scale

Economies of scale describe the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.