By Operating Internationally, a Company May Take Advantage of Business-Cycle

question 86

True/False

By operating internationally, a company may take advantage of business-cycle differences among countries and thereby reduce its financial risks.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of goods produced by a business.

Sales Decrease

A drop in the volume or amount of products or services sold by a company within a specific period.

Variable Costing

A costing method that includes only variable production costs (materials, labor, and overhead) in the cost of goods sold and treats fixed overhead costs as period expenses.

Absorption Costing

Absorption costing is an accounting method that includes all of the manufacturing costs in the cost of a product, including both variable and fixed manufacturing overhead.