Which of the Following Is the Best Example of a Vertically

question 175

Multiple Choice

Which of the following is the best example of a vertically integrated firm?

• A)General Electric, which produces light bulbs, jet engines, washing machines, and so on
• B)Kinko's, which has a photocopy store near many colleges and universities
• C)USX Corporation, which owns ore and coal mines, coke ovens, blast furnaces, mills, and foundries
• D)Intel, which makes computer chips for most of the computer manufacturers
• E)Century 21, which has real estate offices that help people sell a house in one city and buy another house in another city

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Definitions:

Mixed Cost

Expenses that have both fixed and variable components, changing with the level of activity but also containing a static element.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the amount of sales that can decline before a business incurs a loss.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activity, such as rent and salaries.

Absorption Costing

A financial accounting technique that integrates all costs incurred from manufacturing, including direct materials, direct labor, along with both fixed and variable overhead costs, into the total cost of a product.