Diversification

question 142

Multiple Choice

Diversification:

• A) increases risk and return.
• B) decreases risk and return.
• C) increases risk.
• D) decreases risk.

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Definitions:

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific activities and then to products or services based on their consumption of those activities.

Machine-Hours

A measure of the amount of time machines are run in the production process, often used as a basis for allocating manufacturing overhead costs.

Batches

Quantities or groups of products produced or processed at the same time.

Product Margins

The profit earned on the sale of a product after subtracting the cost associated with its production and sale.