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.

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Definitions:

Profit-Maximizing

A strategy or level of production where a firm makes the highest possible profit.

Firm

A business organization, such as a corporation, limited liability company, partnership, or sole proprietorship, that sells goods or services.

Fixed Costs

Business expenses that are not affected by the level of goods or services produced by the business, such as rent, salaries, and insurance.

Price-Taking

A market condition where individual buyers or sellers have no influence over the price of a product due to its abundance in the market and the presence of many competitors.