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Fun Play Global Sourcing (Scenario)

question 17

Multiple Choice

Fun Play Global Sourcing (Scenario)
Fun Play Inc., a company manufacturing toys for children, has decided to outsource some of its value-chain activities. However, the firm has no experience with global sourcing and has hired a consulting firm to assist its managers. The consulting firm has been assigned the task of determining which activities should be outsourced and where the outsourced activities should be located.
-Which of the following would most likely be considered by the consultants while deciding whether to keep each value-adding activity in the home country or locate it in a foreign country?

Recognize how to record the transfer of costs from one production account to another, including Work in Process to Finished Goods, and Finished Goods to Cost of Goods Sold.

Identify and apply factory overhead rates to production costs.

Analyze and adjust factory overhead accounts, including underapplied or overapplied overhead.

Differentiate between period costs and product costs in a manufacturing business.

Definitions:

Histamine

An organic nitrogenous compound involved in local immune responses, regulating physiological function in the gut, and acting as a neurotransmitter.

Vasodilation

The widening of blood vessels, which decreases blood pressure and allows for increased blood flow.

Smooth Muscle Relaxation

The process by which smooth muscles (found in the walls of internal organs and blood vessels) relax, leading to dilation of blood vessels and decreased resistance to blood flow.

B cells

A type of white blood cell that produces antibodies to help fight infections.