The Stars in a BCG Matrix Typically

question 44

Multiple Choice

The stars in a BCG matrix typically:

• A)produce large profits through substantial penetration of expanding markets.
• B)produce large profits and a strong cash flow,but with little upside potential.
• C)may not generate much profit at the moment,but have upside potential to do so.
• D)produce little if any profit,and have low potential for future improvement.
• E)generate high profit for a short span of time and then become inactive.

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Definitions:

Activity Cost

The cost associated with executing specific activities within a business process or department, often used in activity-based costing to allocate overheads more accurately.

Activity Driver

A factor that influences or contributes to the expense of certain business operations, often used in activity-based costing.

High-volume Product Lines

Product categories within a company that produce or sell in large quantities, typically generating significant portions of revenue.

Cost Distortion

An inaccurate allocation of costs to products, often resulting from traditional costing methods that can overstate or understate the true costs of goods.