Signing a Contract to Supply a Given Number of Units

question 109

Multiple Choice

Signing a contract to supply a given number of units converts _____ from a risk to a _____.

• A)cost estimation;gamble
• B)demand;certainty
• C)demand;gamble
• D)analysis;reality

---

Definitions:

Desired Profit

The target profit a company aims to achieve, taking into account costs, pricing strategies, and market conditions.

Incremental Costs

The additional costs incurred when a business increases its level of activity or output, also known as marginal cost.

Additional Revenues

Income received that is over and above the main or expected sources of revenue for a business or an organization.

Direct Material

Raw materials that are directly attributable to the production of goods, essential in determining the cost of goods sold.