The Effect of Spreading Fixed Manufacturing Costs Over a Shrinking

question 115

Multiple Choice

The effect of spreading fixed manufacturing costs over a shrinking master-budget capacity utilization amount results in ________.

• A) greater utilization of capacity
• B) increased unit costs
• C) more competitive selling prices
• D) greater demand for the product

---

Definitions:

Empathy

The ability to understand and share the feelings of another person from their perspective.

Groupthink

A psychological phenomenon occurring within a group of people, in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Illusion of Invulnerability

An overconfidence bias where a group underestimates risks, leading to over-optimistic decision-making.

Ethical Consequences

The outcomes or impacts on morality and ethical principles resulting from specific actions or decisions.