For Small Businesses, Product Differentiation

question 19

Multiple Choice

For small businesses, product differentiation

• A) is more difficult than it is for larger firms because of the high cost of product research and development.
• B) usually concentrates on the pricing component of the total product offer.
• C) can be an important strategy to gain market share.
• D) is less important than it is for big firms with multiple product lines.

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Definitions:

Work in Process

Goods that are in various stages of production within a manufacturing process but are not yet completed products.

FIFO Method

"First-In, First-Out," an accounting method for valuing inventory that assumes the first items purchased or produced are the first ones sold.

Cost Reconciliation

A process of verifying and adjusting the cost of a product or project by comparing budgeted or standard costs to actual incurred costs.

Weighted Average Method

An inventory costing method that assigns an average cost to each unit of inventory, considering the units' weights in the calculation.