Which Would Be an Example of Innovation Within an Existing

question 160

Multiple Choice

Which would be an example of innovation within an existing business firm?

• A) the development of Post-it note pads by the 3M Corporation
• B) the granting of a patent to a university researcher
• C) the formation of the start-up firm Amgen
• D) the merger of AOL and Time-Warner

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Definitions:

Absorption Costing

A technique in accounting that rolls all manufacturing expenses including direct material costs, direct labor, and every overhead, regardless if fixed or variable, into the overall cost of a product.

Unit Product Cost

The overall expense involved in creating one unit of a product, encompassing direct materials, direct labor, and distributed overhead costs.

Absorption Costing

An accounting method that includes all manufacturing costs (both variable and fixed) in the cost of a product.

Variable Costing

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