Commitment Devices Are

question 72

Multiple Choice

Commitment devices are:

• A) mechanisms that allow people to voluntarily restrict their choices in order to make it easier to stick to plans.
• B) socially institutionalized practices that signal a particular commitment has been made by a person.
• C) policies that force participants to choose their future commitments.
• D) None of these statements is true.

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Definitions:

Variable Cost

Costs that vary in direct proportion to changes in levels of production or sales, such as materials and labor directly involved in a product's manufacturing.

Units Sold

The total number of units of product sold within a specific time frame.

Conversion Costs

Costs that are incurred to convert raw materials into finished goods, which typically include labor and manufacturing overhead expenses.

Relevant Costs

Costs that should be considered when making business decisions because they will be affected by the decision.