To Avoid Being Sued for Failure to Warn Users of Products

question 254

Multiple Choice

To avoid being sued for failure to warn users of products, manufacturers must:

• A) take lots of precautions in the manufacturing process
• B) invest a lot in safety research
• C) conduct regular customer satisfaction surveys
• D) have mandatory safety training sessions for all employees
• E) provide adequate warning labels and instructions on products

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Definitions:

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Cost

A sacrifice made to obtain some benefit.

Activity

In accounting and finance, it typically refers to the level of business operations or transactions in a given period.

Relevant Activity Base

A factor that causes changes in the behavior of costs, used to allocate fixed costs to cost objects effectively.