Which of the Following Is Not a Reason for Firms

question 7

Multiple Choice

Which of the following is not a reason for firms to diversify?

• A)Sharing activities
• B)Efficiently allocating internal capital
• C)Increasing managerial compensation
• D)Capturing more market share

---

Definitions:

Variable Overhead

Costs that fluctuate with production volume, such as utilities and raw materials, contrasting with fixed overhead costs.

Direct Materials

The raw materials that are directly traceable to the manufacturing of a product and included in the cost of the product.

Direct Labor-Hours

The number of labor hours expended directly on the production floor by employees actively engaged in manufacturing processes.

Variable Overhead

Variable overhead are those operating costs that vary with levels of output or activity, including utilities, supplies, and certain labor costs.