Many Companies Prefer to Follow Rather Than Challenge the Market

question 134

Multiple Choice

Many companies prefer to follow rather than challenge the market leader. Patterns of ________ are common in capital-intensive, homogeneous-product industries, such as steel, fertilizers, and chemicals.

• A) "feature fashion"
• B) "conscious parallelism"
• C) "supply delay"
• D) "predatory pricing"
• E) "covert security analysis"

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Definitions:

Activity Variance

A disparity that arises when the actual level of business activity differs from what was planned or expected.

Personnel Expenses

The costs associated with employing staff, including wages, salaries, benefits, and taxes.

Direct Labor

The wages of employees directly involved in the production of goods or services, considered a variable cost.

Activity Level

Activity level refers to the volume of production or operations in a business. It is a determinant in both variable costing and activity-based costing, impacting how costs are allocated and managed.