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

question 25

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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