Which of the Following Is Not an Example of When

question 103

Multiple Choice

Which of the following is not an example of when an organization should use an unrelated diversification strategy?

• A) When revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products.
• B) When an organization's present channels of distribution can be used to market the new products to current customers.
• C) When the new products have counter-cyclical sales patterns compared to an organization's present products.
• D) When an organization competes in a highly competitive and/or a no-growth industry.
• E) When existing markets for an organization's present products are not yet saturated.

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Definitions:

Generate Revenues

The process of earning income from business activities, such as sales of goods and services.

Joint Costs

Expenses that are incurred in the process of producing two or more products up to the point where the products are separately identifiable.

Budgeted Costs

Estimated expenses planning for future periods, which companies use for managing financial resources and controlling expenditures.

Responsibility Accounting

This accounting methodology focuses on collecting, summarizing, and reporting financial information related to the responsibilities of individual managers.