As a Project's Degree of Sensitivity to Variable Costs Increases,the

question 53

Multiple Choice

As a project's degree of sensitivity to variable costs increases,the

• A)forecasting risk of the project decreases.
• B)dependence of the final outcome on variable costs decreases.
• C)more attention management should pay to the actual variable costs throughout the project.
• D)lower the maximum potential value of the project.
• E)lower the maximum potential loss of the project.

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Definitions:

Office Salaries

Expenditure related to the payment of wages and salaries for office staff involved in administrative and non-production work.

Product Costs

Costs that are incurred to acquire or manufacture a product, including direct materials, labor, and overhead expenses.

Period Costs

Expenses that are not directly tied to the production of goods and are instead accounted for as expenses in the period they are incurred.

Direct Materials

The raw materials directly traced and integral to the finished product in the manufacturing process.