The Principal Lesson BMW Learned from Michael Dell of Dell

question 40

Multiple Choice

The principal lesson BMW learned from Michael Dell of Dell Computer is:

• A) Customers are looking for the lowest price.
• B) Highly standardized products sell best.
• C) Custom made distribution can attract customers.
• D) Customers who need no technical support will buy from BMW.
• E) Insecure customers who are afraid to venture into dealerships will buy from BMW.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to apply manufacturing overhead costs to products based on a relevant activity, such as machine hours or labor hours.

Underapplied

Describes a situation where the allocated overhead costs in accounting are less than the actual overhead costs incurred.

Overapplied

A scenario in which the overhead cost assigned to manufacturing exceeds the overhead that was actually incurred.

Direct Labor-Hours

A measure of the labor directly involved in manufacturing a product, represented in hours.