Inaccurate Forecasts Can Result in Negative Outcomes Like

question 40

Multiple Choice

Inaccurate forecasts can result in negative outcomes like:

• A)Stockouts and poor responsiveness to market dynamics
• B)High inventory costs of inventory and increased profits
• C)Material shortages and decreased costs of obsolescence
• D)Low inventory costs of inventory and stockouts

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Definitions:

Variable Cost Concept

The principle that costs vary in proportion to the level of production or activity. These costs increase as production increases and decrease as production decreases.

Markup Percentage

The amount by which the cost of a product is increased to arrive at the selling price, expressed as a percentage of the cost.

Fixed Costs

Expenses that do not change with the level of goods or services produced by the business over the short term.

Product Cost Concept

The accounting principle that determines the cost of a product by adding the costs of raw materials, labor, and overhead incurred in its production.