Using Cost-Volume-Profit Analysis, We Can Conclude That a 20 Per

question 53

Multiple Choice

Using cost-volume-profit analysis, we can conclude that a 20 per cent reduction in variable costs will

• A)reduce the break-even sales volume by 20 per cent.
• B)reduce total costs by 20 per cent.
• C)reduce the slope of the total cost line by 20 per cent.
• D)not affect the break-even sales volume if there is an offsetting 20 per cent increase in fixed costs.

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Definitions:

Niche Strategy

A focused marketing approach targeting a specific, well-defined segment of the market, often with specialized products or services.

Product Differentiation

The method of making a product or service stand out from the competition in order to appeal more to a specific target group.

Narrow Market

A market segment characterized by a specific and often limited customer base, interests, or area of focus.

Cost Leadership

A competitive strategy where a company aims to become the lowest-cost producer in its industry or market.