Which of the Following Is a Disadvantage of Straight Product

question 92

Multiple Choice

Which of the following is a disadvantage of straight product extension?

• A) It involves additional product development costs.
• B) It involves changing the product to meet local requirements.
• C) It requires planning a new promotional strategy to promote the product.
• D) It can be costly in the long run if products fail to satisfy consumers.
• E) It requires making changes in the manufacturing process.

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Definitions:

Net Operating Income

An indicator of a firm's earnings derived from its primary, ongoing business activities, not taking into account the subtraction of interest and taxes.

Retained Earnings

The portion of a company's profits that is saved or retained for reinvestment in the business, rather than being paid out as dividends to shareholders.

Direct Labor

The wages and other payroll costs of the employees who directly produce goods or services.

Work in Process

Inventory that includes materials that have been partially completed but are not yet finished goods.