Which Strategy Generally Entails Large Research and Development Expenditures

question 117

Multiple Choice

Which strategy generally entails large research and development expenditures?

• A) Market penetration
• B) Retrenchment
• C) Forward integration
• D) Product development
• E) Divestiture

---

Definitions:

Period Costs

Expenses that are not directly tied to the production process and are expensed in the period in which they occur, such as selling and administrative expenses.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, indicating how much contributes to covering fixed costs and generating profit.

Direct Manufacturing Cost

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

Indirect Manufacturing Costs

Expenses related to the production process that cannot be directly traced to individual products, such as utilities or salaries for management.