Which of the Following Is a True Statement Regarding Research

question 6

Multiple Choice

Which of the following is a true statement regarding research and development?

• A) R&D investments produce equivalent profits.
• B) Research refers to incremental changes in product design.
• C) The law of diminishing returns applies to R&D investments.
• D) Development refers to basic product explorations undertaken by a firm.

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Definitions:

Direct Labor-Hours

The number of labor hours expended directly on the production floor by employees actively engaged in manufacturing processes.

Variable Overhead

Variable overhead are those operating costs that vary with levels of output or activity, including utilities, supplies, and certain labor costs.

Direct Material

Raw materials that can be directly traced to the manufacturing of a specific product and are a significant portion of the production cost.

Direct Labor-Hours

A measure of the time worked by employees who are directly involved in the manufacturing process.