According to the Text, Which of the Following Items Is

question 27

Multiple Choice

According to the text, which of the following items is not considered a broad guideline that can be used in the construction of a comprehensive framework (or system) for the management and control of performance quality?

• A) Use of target costing.
• B) Knowledge of underlying business processes.
• C) Customer-based viewpoint.
• D) Inclusion of non-financial performance indicators.
• E) Reporting of quality cost information, based on a cost-of-quality classification framework.

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Definitions:

Unit Contribution Margin

The measured profit that each unit sold contributes toward fixed costs and profit, calculated by subtracting variable costs from the sales price per unit.

Operating Income

Earnings before interest and taxes (EBIT), which represents the profit a company earns from its core operations.

Fixed Costs

Overhead expenses that remain constant regardless of the volume of activity or production levels within a company.

Cost-volume-profit Analysis

An accounting tool used to determine the effects of changes in costs and volume on a company's profits.