In a Short Essay, Explain Through Examples How a Process

question 10

Essay

In a short essay, explain through examples how a process can be (a)efficient but not effective and (b)effective but not efficient.

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Definitions:

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, representing the portion of sales revenue that contributes to covering fixed costs.

Variable Administrative Expense

Costs that vary directly with changes in business activity levels, like sales commissions or raw material costs.

Direct Materials

Raw materials that are directly incorporated into a finished product and can be easily traced to it.

Discretionary Fixed Costs

Discretionary fixed costs refer to fixed costs that can be altered in the short term by current managerial decisions, such as advertising or research and development expenses.