The Screening and Concept Testing Stage of the New-Product Development

question 147

Multiple Choice

The screening and concept testing stage of the new-product development process is used to:

• A) eliminate undesirable ideas and predict consumer acceptance
• B) refine the promotion campaign to be used with the new product
• C) determine the potential profits to be gained from the new product
• D) determine how long the test market should be run
• E) generate new-product ideas

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Definitions:

Predetermined Rate

A rate established in advance to allocate certain costs, often overhead, to products or job orders based on an estimated or expected basis.

Fixed Overhead

Expenses that do not vary with the level of production or sales, such as rent, salaries of permanent staff, and insurance.

Planned Activity

Activities or tasks that have been scheduled and outlined in advance as part of a project or process planning.

Overhead Application

The process of assigning overhead costs to specific products or activity bases using a predetermined overhead rate.