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Which of the following is FALSE regarding the downward demand spiral? ANSWER It is not usually seen when practical capacity is used as a denominator
Which of the following is FALSE regarding the downward demand spiral?
ANSWER
It is not usually seen when practical capacity is used as a denominator level.
It is typically found when a company uses master-budget capacity utilization as a denominator level.
It results in progressively higher per unit variable costs being allocated to products.
It occurs when competitor prices are not met, causing a drop in demand, and in turn causing a higher per unit cost.
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