Using Porter's Five Forces Model of Industry Competition, the Threat

question 8

Multiple Choice

Using Porter's five forces model of industry competition, the threat of a supplier to an established producer is likely to be increased when:

• A) supply items are a major portion of the product cost.
• B) switching costs are high.
• C) there is a high number of qualified suppliers.
• D) all of the above.
• E) options A and B only.

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Definitions:

Equivalent Unit

A measure used in cost accounting to represent a portion of a product's costs when it is partially completed.

Finished Goods Inventory

The stock of completed products ready for sale at the end of an accounting period.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead costs.

Direct Labor Usage

The total amount of labor directly involved in the manufacturing process, often used in calculating production costs and efficiency.