The Fact That Apple Has No Manufacturing Facilities of Its

question 109

Multiple Choice

The fact that Apple has no manufacturing facilities of its own

• A) has caused it to build up massive debt on its balance sheet.
• B) has enabled it to remain financially lean with virtually no long-term debt.
• C) has been problematic for Apple in terms of debt.
• D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession.
• E) means that it is in the same position as Sony.

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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 that drive costs.

Overhead Applied

The portion of overhead costs allocated to individual products or job orders based on a predetermined rate or method.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or projects based on their use of activities, providing more accurate cost information.

Total Overhead Applied

The total amount of indirect manufacturing costs allocated to units of product based on a predetermined rate.