Assume That Company Executives at the Firm Would Like to Increase

question 26

Multiple Choice

Assume that company executives at the firm would like to increase sales by expanding into an international market.Which of the following factors, if true, best supports a decision to expand sales globally?

• A)It can offshore most of its production.
• B)It can obtain all of its resources for the same price overseas.
• C)Its costs of making additional sales would not increase disproportionately.
• D)The foreign market has higher real interest rates.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities they require.

Fixed Overheads

Expenses that remain constant regardless of production or sales volumes within a specific time frame, like lease payments or wages.

Cost Behaviour

The manner in which a cost changes in relation to changes in business activity levels.

Manufacturing Overhead

All indirect costs associated with the production process, such as the cost of utilities, maintenance, and factory equipment depreciation.