Which Statement Is True About Products in the Decline Stage

question 53

Multiple Choice

Which statement is true about products in the decline stage of the product life cycle?

• A) Brand managers should phase-out this product as quickly as possible.
• B) A declining product may still be profitable for some time and it might be more appropriate to phase-out this product gradually.
• C) Customers will always abandon the declining product immediately if an alternative is available.
• D) Phasing-out a product at this time is fairly easy and this strategy will cut future losses.
• E) None of the above statements are true.

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Definitions:

Allocated Fixed Overhead

Allocated fixed overhead refers to the portion of fixed overhead costs assigned to a particular cost object, such as a product or department, based on a chosen method of allocation.

Appraised Fair Value

Appraised fair value is the estimation of an asset's worth at a particular time, based on expert analysis and market conditions.

Cost

The amount of money or resources expended to acquire an asset or to produce a product or service.