Question：Which of the following would be appropriate cost units for a passenger coach company?
A. (i) Vehicle cost per passenger-kilometre
B. (ii) Fuel cost for each vehicle per kilometre
C. (iii) Fixed cost per kilometre
The correct answer is: (i) and (ii)
The vehicle cost per passenger-kilometre (i) is appropriate for cost control purposes because it combines the distance travelled and the number of passengers carried, both of which affect cost.
The fuel cost for each vehicle per kilometre (ii) can be useful for control purposes because it focuses on a particular aspect of the cost of operating each vehicle.
The fixed cost per kilometre (iii) is not particularly useful for control purposes because it varies with the number of kilometres travelled.
Question：Which stage of the product life cycle do the following characteristics refer to?
New competitors
Customer feedback received
New distribution outlets being found
Product quality improvements made
A. Introduction
B. Maturity
C. Decline
D. Growth
The correct answer is: Growth
The product life cycle stages can be summarised as follows:
Introduction: Basic quality, few competitors, high promotion costs
Growth: As stated in question
Maturity: Most competitive stage, product extension strategies, for example, new markets
Decline: Exit strategy needs to be identified.
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