Michael Porter Has Identified Five Forces That Determine the Intrinsic

question 65

Essay

Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Briefly, list and characterize those forces.

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Definitions:

Standard Direct Labor-Hours

The estimated amount of labor hours required to produce a unit of product, used in budgeting and variance analysis.

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.