One Way Firms Can Gain a Competitive Advantage Without Relying

question 350

True/False

One way firms can gain a competitive advantage without relying on low prices is by developing close, friendly relationships with their customers.

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Definitions:

Absorption Costing

An approach in accounting that factors in every production cost, from raw materials and direct labor to both kinds of manufacturing overheads, variable and fixed, into the price of a product.

Net Operating Income

The profit generated from a company's core business operations, excluding expenses and revenues from non-operating activities.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced items are recorded as sold first.

Absorption Costing

A method of accounting in which all the costs associated with the production of a product are absorbed by that product. This includes direct costs like materials and labor, as well as fixed and variable overhead.