The percent of sales method relies on the fact that capacity increases are ________,even though in practice such increases are ________.
A)incremental,lumpy
B)incremental,incremental
C)lumpy,incremental
D)lumpy,lumpy
E)incremental,smooth

Question

Quizplus · Accepted Answer

The percent of sales method assumes that capacity increases can be made in small increments in response to changes in sales volume, which is incremental. However, in practice, capacity increases often involve larger, more substantial changes, which are lumpy. Therefore, choice A is the best option as it accurately reflects the mismatch between the theoretical assumptions of the method and practical limitations.

The Percent of Sales Method Relies on the Fact That