Acme Software (Scenario) Acme Software Is a U.S.-Based Maker of Software Products for Software

question 87

Multiple Choice

Acme Software (Scenario)
Acme Software is a U.S.-based maker of software products for the health care industry. Recently Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research that shows that German health care companies have a strong demand for the type of software that Acme offers.
-Which of the following would be most important for the consulting group to consider when deciding whether to recommend that Acme internationalize its sales efforts to Germany?

• A) Will Acme save money on advertising by targeting small rather than large companies?
• B) How intense is the competition from German companies offering similar products?
• C) What type of training is received by programmers in software firms abroad?
• D) Is employee empowerment culturally favored in Germany?

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Definitions:

Direct Labor Hour

Direct labor hour refers to the time spent by workers directly involved in the production of goods or services.

Overhead Applied

A portion of overhead costs assigned to a particular cost object based on a predetermined rate.

Direct Labor Efficiency Variance

The difference between the budgeted amount of direct labor required to produce an output and the actual direct labor used.

Favorable

A term used in budgeting and finance to indicate results that are better than expected, such as lower costs or higher revenues.