New-To-The-Firm Products

question 14

Multiple Choice

New-to-the-firm products:

• A) most likely require consumer learning.
• B) most likely involve the incorporation of a very new technology.
• C) tend to revolutionize existing product categories.
• D) are new to a company, but are not new to the world.

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Definitions:

Variable Costs

Disbursements that are contingent upon the magnitude of production or sales transactions.

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, contributing to covering fixed costs and generating profit.

Variable Cost

A cost that varies directly with the level of production or sales volume.

High-low Method

A method applied in cost accounting that calculates fixed and variable expenses by analyzing the maximum and minimum activity levels.