Refer to the Scenario Above

question 57

Multiple Choice

Refer to the scenario above.Which of the following best supports the firm's decision to use licensing as a strategy to enter the Chinese market?

• A) Even though the company is experiencing profits, it cannot afford to take risks while investing in a foreign market.
• B) Cocoabeans has little control over the sales of its products in the U.S. and is looking for the support of a local firm.
• C) The firm has partnered with a local firm on mutually profitable terms.
• D) Cocoabeans has purchased a local firm to market its product in China because it does not want to give full rights to anyone else.

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Definitions:

Manufacturing Overhead

This includes all indirect manufacturing costs that cannot be directly attributed to specific units produced, such as utilities or salaries for factory supervisors.

Work In Process

A phase in manufacturing where items are partially completed but not yet ready for sale.

Job Cost Sheet

A form that records the direct materials, direct labor, and manufacturing overhead cost charged to a job.

Fire Insurance

A type of property insurance that covers damage and losses caused by fire.