Test Marketing Is an Inexpensive Way to Predict Whether a New

question 115

True/False

Test marketing is an inexpensive way to predict whether a new product will be a success.

---

Definitions:

Direct Manufacturing Cost

Expenses directly tied to the production of goods, including labor and materials.

Indirect Manufacturing Costs

These are costs that cannot be directly traced to specific units produced, such as maintenance and cleaning, and are part of the manufacturing overhead.

Incremental Manufacturing Cost

Refers to the additional cost incurred for producing one more unit of a product.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much revenue is available to cover fixed costs and generate profit.