To Maintain Market Share and Revenue in an Increasingly Price-Sensitive

question 172

Multiple Choice

To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality, used labor-saving technologies, and used efficient manufacturing processes. These tactics have provided gains in productivity that have translated into ____ for the consumer.

• A) higher costs for the company and higher prices
• B) higher costs for the company and lower prices
• C) lower costs for the company and lower prices
• D) lower costs for the company and higher prices
• E) no change in the costs for either the company or

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Definitions:

Indirect Expenses

Expenses that cannot be directly traced to a specific cost object, such as rent, utilities, and administrative salaries.

Direct Expenses

Costs that can be directly attributed to the production of specific goods or services.

Overhead

The ongoing administrative and operational costs not directly attributable to the production of goods or services, such as rent and utilities.

Residual Income

The income that remains after deducting all required costs of capital from operating profits, often used to assess divisional or project performance.