Existence of Gray Markets Lead to Which of the Following

question 27

Multiple Choice

Existence of gray markets lead to which of the following outcomes?

• A) They make the distribution channel stronger.
• B) They create a free-rider problem making legitimate distributors' investments in supporting a manufacturer's product less productive.
• C) Goods sold in grey markets are always counterfeit.
• D) Goods sold in grey markets come with standard product warranties.
• E) Taxes imposed on grey market products are very high.

Understand the concept and calculation of direct materials variances, including materials price and quantity variances.

Analyze and calculate the direct labor variances, including labor efficiency and rate variances.

Understand the computation and significance of variable manufacturing overhead variances, including both efficiency and rate variances.

Determine the standard costs of direct materials, labor, and manufacturing overhead for a product.

---

Definitions:

Revenue Report

A financial document that outlines the income generated by a company from its normal business operations.

General Journal Entry

A record in the general journal that includes the date, accounts and amounts to be debited and credited, and a brief description of the transaction.

Related Liabilities

Related liabilities are obligations that are directly associated with the primary operations or financial activities of a business.

Total Billed

The cumulative amount of charges or fees invoiced to a customer for goods or services provided.