If There Are No Vertical, Horizontal, Product Extension, or Market

question 57

Multiple Choice

If there are no vertical, horizontal, product extension, or market extension links between firms, the FTC defines the merger or acquisition activity between firms as a ________ merger.

• A) conglomerate
• B) vertical
• C) horizontal
• D) product extension

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Definitions:

Total Cost Method

An accounting approach that includes all manufacturing or production costs (direct materials, direct labor, and manufacturing overhead) in the cost of finished goods.

Selling Price

The amount a buyer pays to acquire a product or service from a seller.

Total Cost Method

A method of inventory costing that includes all costs of goods purchased or manufactured as inventory costs, without distinguishing between fixed and variable costs.

Administrative Expenses

Overheads or general expenses related to running a business that are not directly linked to the production or sale of goods or services.