Which of the Following Is a Motivation for Vertical Integration

question 65

Multiple Choice

Which of the following is a motivation for vertical integration?

• A)Acquiring a larger customer base
• B)Reducing variable costs through economies of scale
• C)Eliminating a significant competitor
• D)Acquiring a cheaper source of raw materials

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Definitions:

Perpetual Inventory System

A procedural method in inventory accounting that directly records every inventory sale or purchase with the aid of computerized point-of-sale systems and enterprise asset management software.

Sales Tax

A tax on sales or on the receipts from sales.

Credit Memo

A document issued by a seller to a buyer, reducing the amount owed, often due to a return or overcharge.

Perpetual Inventory System

In accounting for inventory, this method promptly captures the transaction of a sale or purchase using advanced computerized point-of-sale systems and enterprise asset management software.