Which Component of Strategy Measures the Reduction in Costs Attributable

question 72

Multiple Choice

Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output?

• A) the growth component
• B) the price-recovery component
• C) the productivity component
• D) the cost leadership component

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Definitions:

Work In Process Inventory

Goods that are in various stages of the production process but are not yet completed products.

Equivalent Units Of Production

A concept in cost accounting to express the amount of work done by suppliers on units of production, partially completed.

Process Costing Environment

A costing methodology used in industries where production is continuous, and costs are accumulated for a set period before being assigned to products.

Equivalent Units Of Production

A concept in cost accounting used to allocate costs to partially completed units of production, enabling a consistent way to value inventory and measure productivity.