What Different Kinds of International Organizational Strategies Could a Firm

question 8

Essay

What different kinds of international organizational strategies could a firm use in conducting international business?

Realize the importance of choosing products with higher contribution margins for profitability in the short run.

Understand the differences between absorption costing and variable costing.

Identify which costs are included and excluded under both costing methods.

Determine the conditions under which income under absorption costing equals, exceeds, or is less than income under variable costing.

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Definitions:

Direct Materials Quantity Variance

The difference between the expected and actual quantity of materials used in production, multiplied by the standard cost per unit of material.

Actual Costs

The real costs incurred in the production of goods or services, including all expenses such as materials, labor, and overhead.

Standard Costs

Predetermined costs for materials, labor, and overhead used to control actual operating costs and to measure cost variances.

Direct Labor Time Variance

The difference between the actual time spent on production and the standard time expected, multiplied by the direct labor rate.