Question

which of the following statements about cost reductions is true?

A. cost reductions often require improvements in the delivery of care

B. cost reductions can occur when services are being expanded

C. decreases in revenues in automatic cost reductions

D. none of the above

Answer 1

C. Decreases in revenue result in automatic cost reductions.

cost reduction is the process by which companies tend to minimise the cost of production without decreasing its quality, in this companies are spending millions to develop cost control systems. Portion of the total cost of production is always a variable cost and this can be reduced by reducing the total cost of commission by paying out less as there will be a less salesman and that eventually reduces revenue.

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