Which of the Following Statements Best Explains Why Idea Screening

question 21

Multiple Choice

Which of the following statements best explains why idea screening may be the most important step of new product development?

• A) It increases the number of ideas generated.
• B) It provides an opportunity for the marketer to test the prototype in a simulated market.
• C) It helps forecast the products' sales and profits accurately for a specific period.
• D) It gives research and development team members an opportunity to gather consumer feedback.
• E) It saves the company money in product development costs by going ahead with only the product ideas that are likely to be profitable.

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Definitions:

Gross Margin

A company's net sales revenue minus its cost of goods sold (COGS), expressed as a percentage. It reveals how much profit a company makes before expenses.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true.

Fixed Manufacturing Cost

Costs that do not vary with the level of production, such as rent, salaries of permanent employees, and depreciation of factory equipment.

Manufacturing Overhead Cost

The total of all costs associated with manufacturing beyond direct materials and direct labor, including indirect expenses such as maintenance and factory utilities.