A Localization Strategy Should Be Considered When

question 25

Multiple Choice

A localization strategy should be considered when

• A) it allows a firm to capture the cost reductions of mass-producing a standardized product.
• B) it reduces duplication of functions.
• C) it involves longer production runs.
• D) it makes sense if the value added by customization supports higher pricing.
• E) it substantially reduces local demand.

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Definitions:

Single Plantwide Factory Overhead Rate

A method of allocating factory overhead to all units produced across an entire plant, using a single, uniform rate.

Direct Labor Hours

A measure of the total hours worked by workers who are directly involved in the manufacturing process.

Small Table Lamp Production

The manufacturing process involved in creating small, portable lighting devices designed to stand on tables.

Single Plantwide Rate

An accounting method applying one overhead cost rate to all products, regardless of the department in which they were produced, simplifying the allocation of manufacturing overhead costs.