A Major Advantage of Diversification Is That Overall Monitoring Costs

question 135

True/False

A major advantage of diversification is that overall monitoring costs are reduced,since each separate business comes under the control of corporate headquarters.

Understand the criteria for an instrument to be deemed negotiable.

Distinguish between negotiable and non-negotiable instruments.

Grasp the concept of endorsement and delivery in the negotiation of instruments.

Appreciate the significance of having a negotiable instrument in international commerce.

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Definitions:

Actual Manufacturing Overhead Costs

The incurred expenses related to producing goods that are not directly tied to the product such as utilities, rent, and maintenance.

Overapplied Overhead

A situation where the allocated manufacturing overhead costs for a period exceed the actual overhead costs incurred.

Manufacturing Overhead Costs

All indirect costs associated with the production process, such as utilities, rent, and salaries for non-direct labor.

Actual Manufacturing Overhead Costs

The real costs incurred from indirect manufacturing expenses such as utilities, rent, and salaries not directly tied to production.