Which of the Following Is True of Value Engineering

question 71

Multiple Choice

Which of the following is true of value engineering?

• A) It is the process of building a new product by first determining the selling price of the product.
• B) It is the process by which a company analyzes its own process to reduce cost.
• C) It is the process by which a systematic evaluation of all aspects of the value chain, with the objective of reducing costs and achieving a predetermined quality level.
• D) It is the process by which the competitor's products are disassembled and analyzed.

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Definitions:

Fixed Costs

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

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a business.

Contribution Margin

The amount by which the unit selling price exceeds the unit variable cost.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance premiums.