Because Consumers Are Generally More Sensitive to Price Increases Than

question 132

True/False

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

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Definitions:

Factory Overhead

All the indirect costs associated with the production process, such as utilities, maintenance, and salaries for production managers.

Labor Costs

The total expenditure borne by employers for the employment of labor, including wages, salaries, benefits, and taxes associated with employment.

Production Orders

Production orders are formal instructions or commands to start the manufacture of a specific quantity of products at a certain time, detailing materials, equipment, and departments involved.

Product Costs

Product costs are the costs directly associated with the manufacturing of goods, including materials, labor, and overhead.