If a Product Is Experiencing Negative Profits and the Company

question 26

Multiple Choice

If a product is experiencing negative profits and the company is spending a great deal of money on advertising to make consumers aware of the product,the product is most likely in the _____ stage of the product life cycle.

• A)growth
• B)decline
• C)introductory
• D)maturity
• E)intermediate

---

Definitions:

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or budgeted) cost.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.

Standard Cost Variances

The differences between the actual costs incurred and the standard costs set for producing a good or service.