Which of the Following Is a Potential Risk of a Brand

question 21

Multiple Choice

Which of the following is a potential risk of a brand umbrella?

• A)The brand umbrella reduces the incumbents sunk cost of introducing a new product
• B)The umbrella brand may help the incumbent navigate the vertical chain
• C)The brand umbrella allows an incumbent offset uncertainty about the quality of a new product
• D)A brand umbrella may make suppliers and distributors more willing to enter relationship specific investments in or sell credit to incumbents
• E)If a new product under the umbrella fails,consumers may become disenchanted with the entire brand

Grasp the principle of the contribution margin ratio and its impact on profitability.

Learn how changes in selling price and sales volume affect net operating income.

Calculate the required sales volume to achieve a target profit.

Comprehend the use of the degree of operating leverage and how it affects net operating income in response to sales changes.

---

Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance of factory equipment, and salaries of factory supervisors.

Job Cost

The total cost of materials, labor, and overhead allocated to a specific job or project.

Unit Product Cost

The cost assigned to a single unit of product, combining direct materials, direct labor, and manufacturing overhead expenses.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to individual products based on a common activity base.