For a Business That Offers Customers a Store Where Product

question 28

Multiple Choice

For a business that offers customers a store where product can be purchased and picked up or a delivery service that can ship the product directly to the customer, which of the following would most likely be the best cost allocation base for distribution costs?

• A) number of customer service phone calls and emails per period
• B) number of pounds of product shipped or delivered
• C) Electricity costs for the period
• D) Number of products sold

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Definitions:

Close Substitutes

Products or services that can easily replace each other in consumption, showing a high level of interchangeability.

Resource Demand

The desire for resources (such as labor, capital, and natural resources) based on their contribution to the production process, influenced by factors like technological change and product demand.

Elasticity of Resource Demand

A measure of how much the quantity demanded of a resource changes in response to a change in its price.

Resource Quantity Demanded

Refers to the total quantity of a resource that buyers are willing and able to purchase at a given price over a specific period.