A Change in the Technique for Producing an Existing Product

question 122

Multiple Choice

A change in the technique for producing an existing product is known as

• A)product innovation.
• B)investment.
• C)invention.
• D)an increase in productivity.
• E)process innovation.

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Definitions:

Product Cost Method

A method of accounting for costs that are directly associated with the production of goods, including direct materials, direct labor, and factory overhead.

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and overhead costs.

Sunk Cost

This is a cost that has already been incurred and cannot be recovered, which should not affect future business decisions.

Differential Analysis

A decision-making tool that examines the financial impact of alternative business decisions by focusing only on the relevant costs and benefits that differ between choices.