When a Company Such as Nike Wishes to Pursue a Comparative

question 26

Multiple Choice

When a company such as Nike wishes to pursue a comparative advantage strategy, it would have product designing and development and special material development conducted in the United States and _________________ operations conducted in labor-abundant countries like China or Brazil.

• A)manufacturing
• B)custom painting
• C)testing
• D)inventory
• E)promotion

---

Definitions:

General Factory

Typically refers to a manufacturing site where various goods are produced through a combination of human labor, machines, and processes.

Activity Cost Pool

A collection of all costs associated with a specific activity or process, used in activity-based costing to allocate indirect costs to products or services.

Overhead

Overhead refers to the ongoing business expenses not directly attributed to creating a product or service, including costs like rent, utilities, and insurance.

Direct Labor-Hours

The total hours worked by labor directly involved in the manufacturing process, crucial for calculating labor costs and efficiencies.