Which of the Following Is a True Statement About Cost

question 81

Multiple Choice

Which of the following is a true statement about cost behaviors in incremental analysis?
1. Fixed costs will not change between alternatives.
2. Fixed costs may change between alternatives.
3. Variable costs will always change between alternatives.

• A) 1
• B) 2
• C) 3
• D) 2 and 3

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Definitions:

Established Technology

Technology that has been widely adopted, proven reliable, and is well understood within its intended markets or applications.

New Industry

An emerging sector or market that has recently begun to develop and offers potential for business opportunities and growth.

Cannibalization

A reduction in sales volume or market share of a company’s existing product due to the introduction of a new product made by the same company.

Product-line Extensions

The introduction of new products to an existing product line, usually related to the current products but targeted to meet different customer needs or preferences.