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.