Osprey Company Is Trying to Decide Between the Following Two

question 12

Multiple Choice

Osprey Company is trying to decide between the following two alternatives: Which of the following conclusions can be drawn from this example?
$$\begin{array} { | l | r | r | } \hline & \text { Alternative A } & \text { Alternative B } \\\hline \text { Projected revenue } & \$ 50,000 & \$ 60,000 \\\hline \text { Direct material } & 6,000 & 12,000 \\\hline \text { Assembly labor } & 9,000 & 9,000 \\\hline \text { Production supervisor's salary } & 10,000 & 10,000 \\\hline\text { Facility-related costs } & 10,000 & 15,000 \\\hline \text { Profit } & \$ 15,000 & \$ 14,000 \\\hline & & \\\hline\end{array}$$

• A)Variable costs are always relevant for decision making.
• B)Fixed costs are sunk and thus are never relevant for decision making.
• C)Relevant costs may include variable costs and fixed costs.
• D)None of the above.

Recognize the varied success and applicability of guerrilla marketing strategies for startups.

Grasp the impact of website design choices on user engagement and success.

Learn the effective uses of social media in inspiring, entertaining, building trust, and the limitations in direct sales.

Understand the dynamic nature of the marketing mix over time.

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Definitions:

Selling Price

The amount a buyer pays to acquire a product or service, potentially including discounts, allowances, and added taxes.

Fixed Expense

Costs that do not change with the level of production or business activity, such as rent or salaries.

Break-even

The juncture where the total expenses match the total income, leading to a situation where there is no profit or loss.

Selling Price

The amount of money charged for a product or service, determined by cost, market demand, and competition.