Consumer Advocates Believe the Practice of Downsizing by Consumer Products

question 124

Multiple Choice

Consumer advocates believe the practice of downsizing by consumer products firms has resulted in __________.

• A) lower product prices for consumers because of lower labor, raw material, and packaging costs
• B) a greener environment due to the reduction in the amount of packaging, thereby reducing the amount of waste disposed in landfills
• C) fewer product choices for consumers that led to riding prices
• D) keeping prices from rising in response to the psychological barriers consumers have developed for downsized products
• E) a subtle, deceptive, yet legal practice of increasing the price

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Definitions:

Income Statement

A financial statement that showcases a company's revenues, expenses, and net income over a specific period, reflecting its financial performance.

Variable Costing

A method of cost accounting in which only variable production costs (materials, labor, and variable overhead) are included in the cost of a unit of product.

Unit Product Cost

The total cost to produce one unit of a product, including direct materials, direct labor, and overhead allocated on a per-unit basis.

Absorption Costing

This method in accounting ensures that the costing of a product fully reflects all manufacturing expenses, which cover direct materials, direct labor and all overhead costs, fixed and variable alike.