InterviewSolution
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(a) What are convenience products ? Give any two examples. (b) What is semi-variable cost ? Give one example. (c) What is meant by ‘Revenue Expenditure’ ? (d) What is Direct Mail advertising ? Give any two advantages of it. (e) State two disadvantages of internal recruitment. |
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Answer» (a) Convenience Goods : These are the products which consumers purchases frequently and with minimum efforts. Bread, butter, milk, toothpaste, soaps, newspaper etc., are the examples of convenience goods. (b) Semi – Variable Costs : The costs which vary with every increase or decrease in the volume of production but do not vary proportionately are called as semivariable costs. Such costs contain fixed and variable elements. Because of the variable element, they fluctuate with volume and because of fixed element they do not change in direct proportion to output. Depreciation, repairs etc, are the examples of the semi-variable costs. (c) Revenue Expenditure : Revenue expenditure means the expenditure the benefit of which is exhausted within the current year. Such expenditure is of a recurring nature and does not result in the acquisition of permanent assets. These expenditure are incurred for meeting day to day requirement of the business enterprise. All expenses incurred on day- to-day administration of a firm and the effect of which is completely exhausted within the current accounting are called revenue expenditure. Examples of revenue expenditure are ; rent; salaries ; wages etc. (d) Direct Mail Advertising : In this medium, a mailing list of potential customers is prepared. The message is sent directly to individual customers through mail in the form of circular letters, booklets, leaflets, folders and catalogues which containing detailed information about the product are sent by post to these buyers. Advantages of Direct Mail’Advertising are : 1. It is the most selective medium as the message is sent to selected persons directly. 2. It has a personal touch since the message is addressed to a particular person. 3. It ensures secrecy in advertising since the competitors do not get the information contained in the message. (e) Disadvantages of internal recruitment are : 1. Limited Choice : Internal recruitment restricts the choice of management. The existing employees may not be suitable for higher positions. Competent and deserving candidates from outside do not get the opportunity to be considered for these posts. 2. Inbreeding : When all higher level vacancies are filled in by promoting present employees, new ideas and fresh thinking may not enter the organisation. |
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