Which of the Following Represents a Business Unit That Shows

question 13

Multiple Choice

Which of the following represents a business unit that shows rapid growth but poor profit margins?

• A) Star
• B) Cash cow
• C) Problem child
• D) Loss leader
• E) Dog

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Definitions:

Raw Material Cost

The expenditure incurred for the raw ingredients or basic materials that are converted through manufacturing processes into goods or services.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Labor

The body of persons engaged in work or employment, especially manual or physical work.

Materials

The physical substances from which objects are made, available in different forms and used for various purposes in production.