Which of the Following Best Describes Incremental Change

question 40

Multiple Choice

Which of the following best describes incremental change?

• A)It occurs when an organization plans to make a complete transformation in strategic direction in the future.
• B)It occurs when an organization plans to make improvements in strategic direction in the future.
• C)It occurs when an organization entirely changes its strategic direction.
• D)It occurs when an organization makes improvements while moving in its current strategic direction.

---

Definitions:

Sunk Cost

Expenses that have already been incurred and cannot be recovered, which should not influence future business decisions.

Scrap Value

The estimated resale value of an asset after its useful life is over and it is deemed to no longer be usable for its intended purpose.

Contribution Margin

The difference between sales revenue and variable costs of a product, indicating how much contributes towards covering fixed costs and earning profit.

Fixed Costs

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