When It Comes to New Product Development, There Are Degrees

question 109

Multiple Choice

When it comes to new product development, there are degrees of newness. Which of the following is NOT a new product?

• A) product improvements
• B) product line extensions
• C) new category
• D) new inventions
• E) All of the above are considered new products.

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, highlighting the fixed versus variable costs structure of a business.

Variable Costs

Costs that change in proportion to the level of production or sales activity, such as raw materials and direct labor.

Operating Income

Income earned from a firm's regular business operations, excluding deductions of interest and taxes.

Absorption Costing

A costing method where all manufacturing costs, including both fixed and variable costs, are attributed to the product, thus fully absorbing them.