If a manager increases the system utilization standard (assuming no change in the customer arrival rate) what happens to the average customer time in the system?

a. it increases exponentially.
b. it increases proportionally.
c. it decreases proportionally.
d. it decreases exponentially.
e. it does not change.

A. It increases exponentially.

Explanation:

As an exponential increase refers to an increase by a large amount, If a manager increases the system utilization standard while assuming no change in the customer arrival rate the average customer time in the system "increases exponentially".

Answer and Explanation:

1. The product cost involved all the manufacturing cost i.e. direct cost that includes direct material, direct labor, manufacturing overhead etc

2. The period cost involved non-manufacturing cost i.e. indirect cost like rent expense, fixed selling & admin expenses, depreciation expense, etc

Therefore for 1 the option c is correct and for 2 the option b is correct