Scenario 14

question 238

Multiple Choice

Scenario 14.1 Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available through retail department stores such as Kohl's and Macy's. Their wholesale-based brands division is positioned as customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture, and Mexx. These premium brands are sold through stores that the Claiborne company owns.
Refer to Scenario 14.1. The Liz & Co brand is sold only at JCPenney. This is an example of ____ distribution.

• A) selective
• B) routine
• C) horizontal
• D) intensive
• E) exclusive

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Definitions:

Prime Cost

The combined direct costs of raw materials and labor that are directly attributable to the production of a product.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of a product, including indirect materials, labor, and other overhead expenses.

Product Costs

Costs directly associated with the manufacturing of goods, including materials, labor, and overhead.

Inventoriable Costs

Synonym for product costs.