When Two Firms Which Do Not Participate in the Same

question 25

Multiple Choice

When two firms which do not participate in the same industries, for example, a software company and a fast food restaurant company, decide to merge, the result is called a ________ merger.

• A) vertical
• B) horizontal
• C) linear
• D) conglomerate

---

Definitions:

Cost Object

Anything for which cost is measured and assigned, such as a product, service, project, or customer.

Indirect Cost

Expenses not directly attributable to a specific product or activity, often including overhead costs like utilities.

Contribution Format

A type of income statement where costs are divided into variable and fixed categories, emphasizing the contribution margin.

Traditional Format

In accounting, a conventional way of presenting financial statements that may include the income statement in a single-step or multi-step format, depending on the level of detail.