In a Meeting to Generate New Products, the Advisory Committee

question 28

Multiple Choice

In a meeting to generate new products, the advisory committee felt that it had come up with some excellent ideas. Now that there is a list of product ideas, what is the next step?

• A) business analysis
• B) product development
• C) product analysis
• D) test marketing

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Definitions:

Fixed Manufacturing Costs

Expenses that do not change with the level of production, including things like rent for factory space and salaries of permanent staff.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Product Costs

All costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. Also see Inventoriable costs.

Manufacturing Costs

Expenses directly related to the production of goods, including direct materials, direct labor, and manufacturing overhead.