If an organization's variable costs are relatively high then the strategic focus is on
A) input costs
B) interest rates
C) contribution
D) technology

Question

Quizplus · Accepted Answer

Variable costs are costs that change with changes in the level of production, such as raw materials and direct labor. If an organization's variable costs are relatively high, then the strategic focus would be on lowering input costs. This could be achieved through negotiating better prices with suppliers, improving the supply chain, or finding alternative suppliers with lower prices. Focusing on interest rates, contribution or technology may not directly address the issue of high variable costs.

If an Organization's Variable Costs Are Relatively High Then the Strategic