Active Ownership of a Foreign Company or of Overseas Manufacturing

question 22

Multiple Choice

Active ownership of a foreign company or of overseas manufacturing or marketing facilities is called ____________.

• A) direct foreign investment
• B) foreign institutional investment
• C) contract manufacturing
• D) licensing

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Definitions:

Conversion Cost

The combined cost of direct labor and manufacturing overheads incurred to convert raw materials into finished goods.

Equivalent Unit

A concept used in cost accounting to denote a partial completion of a product, quantitatively expressed in terms of the full units of output.

Work In Process

Refers to the materials, labor, and overhead costs that are in the process of being converted into finished products in manufacturing.

Equivalent Unit

A concept used in cost accounting to represent a partially finished unit of product, allowing the calculation of the cost per unit during various stages of production.