When Advertising Acts to Encourage and Maintain Brand Loyalty It

question 68

Multiple Choice

When advertising acts to encourage and maintain brand loyalty it supports successful price increases. Economists call this:

• A) inelasticity of demand
• B) selective demand stimulation
• C) direct response advertising
• D) primary demand stimulation

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products or job orders, calculated based on estimated costs and activity levels before the period begins.

Variable Overhead

Costs that fluctuate with the level of production activity, such as utilities for the manufacturing plant or commissions for sales staff.

Efficiency Variance

The difference between the actual amount of resources used in production and the amount that was expected to be used, indicating the level of efficiency in using materials, labor, and overhead.

Denominator Level

A term used in cost accounting to describe the level at which fixed costs are allocated to units of production.