Final answer:
It is true that if indirect-cost rates were based on actual short-term usage, lower demand periods would indeed lead to lower indirect costs per unit. This reflects the importance of utility-maximization strategies and consumption habits, especially during times when costs fluctuate, such as after natural disasters or during changes in market demand.
Step-by-step explanation:
The statement 'If indirect-cost rates were based on actual short-term usage, periods of lower demand would result in lower costs per unit' is true. Indirect costs, which are not directly traceable to a single product, are often allocated based on usage or some other activity measure. When a company experiences lower demand, its overall indirect costs may remain constant, but those costs when spread over a smaller number of units result in a lower cost per unit. This is similar to the concept of economies of scale but in reverse.
Utility-maximization decisions are influenced by changes in price, as seen during the price hikes for natural gas and electricity after Hurricanes Katrina and Rita in 2005. People reduce their energy usage due to higher costs, illustrating how budget constraints can lead to changes in consumption habits. In a business context, the application of indirect-cost rates based on short-term usage may also result in cost savings during periods when demand decreases since costs like utilities can be adjusted in real time based on consumption. An example is limiting the use of high-power devices during off-peak hours, which aligns with the goal of reducing power consumption over time, thereby saving on energy costs proportionally. The adoption of more energy-efficient devices like compact fluorescent light bulbs further exemplifies how consumption and indirect costs can be managed effectively in relation to usage.