Which of the Following Is NOT a Result of Overdiversification

question 2

Multiple Choice

Which of the following is NOT a result of overdiversification?

• A) Executives do not have a rich understanding of all of the firm's business units.
• B) Managers emphasize strategic controls rather than financial controls.
• C) Firms use acquisition as a substitute for innovation.
• D) Managers become short-term in their orientation.

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Definitions:

Weighted-Average Method

A costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighting by the number of units.

Direct Labor Cost

The total cost of all labor directly involved in the production of goods or services, which can be easily traced to the product.

Equivalent Units

A technique in cost accounting used to allocate costs to partially completed goods, expressed in terms of fully completed units.

FIFO Method

Another term for FIFO, emphasizing its role as an accounting method where the oldest inventory items are recorded as sold first.