By Focusing on Efficiency of Operations and Processes, Lower Costs

question 17

Multiple Choice

By focusing on efficiency of operations and processes, lower costs, and delivering good value, Southwest Airlines attempts to build a competitive advantage based on:

• A) production orientation.
• B) customer intimacy.
• C) process improvement.
• D) operational excellence.
• E) strategic efficiency.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs in product costs and treats fixed production costs as period costs.

Reconciliation Method

A process used to ensure that two sets of records or balances are in agreement, often used in accounting to compare transactions and balances.

Contribution Format

An income statement format that separates fixed costs from variable costs to highlight the contribution margin of a company.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overheads) in the price of a product.