Which of the Following Statements Is True When There Is

question 42

Multiple Choice

Which of the following statements is true when there is a defect in design of a product?

• A)There was a failure to provide adequate instruction on use of the product.
• B)There was a failure to warn customers about the possible dangers of using the product.
• C)A single item is defectively designed and it has the potential to cause injury.
• D)All of the products are defectively designed and have the potential to cause injury.

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Definitions:

Fixed Costs

Expenses that do not change with changes in the level of production or sales, such as rent, salaries, and insurance.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, used to cover fixed costs and generate profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit; an important metric in understanding per unit profitability and in break-even analysis.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.