Economies of Scale Are Rarely Realized in a Horizontal Merger

question 83

True/False

Economies of scale are rarely realized in a horizontal merger.

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Definitions:

Estimated Activity Volume

The projected amount of activity or production, measured in units, hours, or any other quantifiable terms, expected for a certain period.

Activity Cost Pool

A “bucket” in which costs are accumulated that relate to a single activity measure in an activity-based costing system.

Plantwide Overhead Rate

A single predetermined overhead rate that is used throughout a plant.