If Life-Cycle Costs Exceed the Target Cost of a Product,managers

question 96

Multiple Choice

If life-cycle costs exceed the target cost of a product,managers will strive to reduce

• A)the cost of special orders.
• B)the level of activities that are non-value-added.
• C)product variety.
• D)period costs.

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Definitions:

Acquisition Cost

The total expense incurred to acquire an asset, including the purchase price and all related costs.

Inventory Stock

Goods or materials that a business holds for the ultimate goal of resale.

Reorder Point

The inventory level at which action is taken to replenish a particular stock item, ensuring adequate supply while minimizing holding costs.

Carrying Cost

An expense related to holding inventory, including storage, insurance, and obsolescence costs.