When Managers Identify a Market Trend That Suggests a New

question 12

Multiple Choice

When managers identify a market trend that suggests a new opportunity and then devise a strategy to go after this new opportunity, they are involved in the function of

• A) controlling.
• B) planning.
• C) leading.
• D) organizing.

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Definitions:

Contribution Margin

The amount by which a product's selling price exceeds its total variable cost, indicating how much contributes to covering fixed costs and generating profit.

Variable Selling Expense

Costs that vary directly with the volume of sales, such as commissions or shipping fees.

Fixed Selling Expense

Expenses that remain constant regardless of the volume of goods or services sold, such as salaries and rent for the sales department.

Variable Administrative Expense

Expenses that fluctuate in total in direct proportion to changes in activity level, such as sales volume or production output.