The Process Whereby a Firm Determines the Costs Associated with Organizational

question 16

Multiple Choice

The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called

• A) the resource-based approach.
• B) value chain analysis.
• C) strategic cost analysis.
• D) the internal factor evaluation matrix.
• E) cost-benefit analysis.

---

Definitions:

Direct Labor Hour

A measure of the labor time directly involved in the production of goods, often used in costing and budgeting.

Standard Quantities

Standard quantities refer to the predetermined amounts of material, labor, and overhead that should be used in the production of a good or service, serving as a basis for cost control and efficiency analysis.

Standard Rates

Predetermined costs or charges used for billing, budgeting, or for setting up baseline expectations for financial performance.

Standard Direct Materials Quantity

The amount of raw materials budgeted to be used in the production of goods, based on efficiency standards.