To Maintain Market Share and Revenue in an Increasingly Price-Sensitive

question 12

Multiple Choice

To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality, used labour-saving technologies and used efficient manufacturing processes.These tactics have provided gains in productivity that have translated into __________ for the company and __________ for the consumer.

• A)higher costs; higher prices
• B)higher costs; lower prices
• C)lower costs; lower prices
• D)lower costs; higher prices
• E)no change in costs; no changes in prices

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Definitions:

Revenue Recognition

The accounting principle governing the specific conditions under which revenue is recognized or recorded.

Nonrefundable Up-Front Fees

Payments made upfront for services that will not be returned, even if the service or product is not used or delivered as expected.

GAAP

Generally Accepted Accounting Principles; a set of accounting standards and practices used to prepare financial statements in the U.S.

Service Contract

A service contract is a legally binding agreement between two parties where one agrees to provide a specified service to the other for a payment.