As a Firm Moves from Local Option Systems to Regional

question 7

Multiple Choice

As a firm moves from local option systems to regional and global systems

• A) agency costs increase.
• B) coordination costs decrease.
• C) transaction costs increase.
• D) both transaction and agency costs increase.

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Definitions:

In-progress Inventory

Items that are currently being manufactured or are in the process of being transformed from raw materials to finished goods.

Finished Goods Inventory

An end item ready to be sold, but still an asset on the company’s books.

Raw Materials

Basic materials that are processed or refined to create a final product in manufacturing.

Monthly Sales

The total revenue or number of units sold by a business during a calendar month.