With Respect to Positioning,explain Points-Of-Parity and Points-Of-Difference

question 124

Essay

With respect to positioning,explain points-of-parity and points-of-difference.

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Definitions:

Common Fixed Expenses

Overhead costs that do not vary with the level of production or sales, shared by multiple business units or products.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Ending Inventory

The total value of all goods available for sale at the end of an accounting period, not yet sold.

Variable Production Costs

Costs that vary directly with the level of production, such as materials, labor, and utilities needed for manufacturing.