In Which of the Following Circumstances Is a Strategy to Be

question 8

Multiple Choice

In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation?

• A)When the offerings of rival firms are essentially identical,standardized,commodity-like products
• B)When there are few ways to achieve differentiation that have value to buyers
• C)When price competition is especially vigorous
• D)When buyers have widely varying needs and special requirements,and when the costs of switching purchases from one seller to another are relatively high
• E)When industry newcomers use introductory prices to build a customer base

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Definitions:

Variable Costing

A ledger maintaining technique that factors in only the variable costs incurred during production (direct materials, direct labor, and variable manufacturing overhead) into product pricing.

Absorption Costing

In this financial accounting strategy, the entirety of manufacturing expenses—encompassing direct materials, direct labor, and both variable and fixed overheads—are captured in the cost of a product.

Segmented Income Statement

An income statement broken down into segments or divisions of a company, showing financial performance for each separately.

Electronic Calculators

Electronic devices used for performing mathematical operations, ranging from basic to complex calculations.