What Would Happen to a Blanket Rate If Production Volumes

question 8

Multiple Choice

What would happen to a blanket rate if production volumes were reduced?

• A) The fixed cost per unit of the product would decrease.
• B) The unit cost of a product would increase.
• C) The unit cost of a product would decrease.
• D) The direct cost per unit of a product would increase.

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Definitions:

Inspecting

The process of examining something carefully in order to ascertain its condition, quality, or compliance with certain standards or regulations.

Lost Profits

Financial gains that could have been earned but were not due to a breach of contract or other wrongful act.

Consequential Damages

Compensation for losses not directly caused by a breach of contract but resulting as a foreseeable consequence of the breach.

Breach of Warranty

The failure to fulfill the terms of a promise or guarantee made about the quality or functionality of a product or service.