For Organisations to Remain Competitive, They Need to Think Carefully

question 10

Multiple Choice

For organisations to remain competitive, they need to think carefully about which raw materials they will use to produce their goods or services, because:

• A) the increasing scarcity of non-renewable resources is making them more expensive, and will force businesses to increase the prices of their products or services.
• B) renewable resources are of a higher quality than non-renewable resources.
• C) there will be greater availability of non-renewable resources than renewable resources in the longer term.
• D) organisations using renewable resources can obtain them at a lower price.
• E) All of these responses are correct.

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Definitions:

Overhead Cost

Expenses not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Activity-Based Costing

A costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption.

Supporting Assembly

Components or materials put together as part of a larger item or system in the manufacturing process.

Activity-Based Costing

An accounting technique that distributes indirect and overhead costs to distinct activities, offering a more accurate determination of product costs.