In a Graph with Cumulative Costs Per Unit as the Y-Axis

question 134

Multiple Choice

In a graph with cumulative costs per unit as the Y-axis, with two curves, one being the cumulative costs locked-in, and a second curve showing the cumulative costs per unit incurred in different business functions, which of the following is TRUE?

• A)The graph will show the divergence between the amount of locked-in costs and costs incurred, by the end of the production cycle.
• B)Locked-in costs rise much slower initially than the incurred cost, but joining the incurred cost line at the completion of the value chain functions.
• C)The two cost lines will run parallel.
• D)No differences unless the product is manufactured inefficiently.
• E)Both curves deal with the same cumulative cost per unit.

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