Jeff, the Sales Manager for Audio-Visual Systems, a Small Family

question 59

Multiple Choice

Jeff, the sales manager for Audio-Visual Systems, a small family business, is eager to get the company on an export path. The CEO of the company is not convinced, however. To convince the CEO, Jeff should point out that firms that do not export often

• A) face problems of currency conversion.
• B) lose out on significant opportunities for cost reduction.
• C) are able to reduce their unit costs.
• D) typically grow faster than those that do.
• E) can more easily leverage their technology in foreign markets.

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Definitions:

Equivalent Units

A concept used in cost accounting to convert the amount of work done on partially finished goods into the number of fully finished units.

Weighted-average

A method used in accounting and finance to calculate an average that takes into account the varying degrees of importance of the numbers in the dataset.

Conversion

The process of changing raw materials into finished goods, or the conversion of currencies, data, or resources from one form to another.

Equivalent Units

A principle applied in process costing that transforms units of incomplete production into an equivalent number of units as if they were fully completed.