Use the Information Below to Answer the Following Questions

question 28

Multiple Choice

Use the information below to answer the following questions.
Fact 10.1.1 The Colvin Interview: Chrysler
The key driver of profitability will be that the focus of the company isn't on profitability. Our focus is on the customer. If we can find a way to give customers what they want better than anybody else, then what can stop us?
Source: Fortune, April 14, 2008
-Refer to Fact 10.1.1. In spite of what Chrysler's vice chairman and co-president claims, Chrysler's focus actually is on profitability because

• A)all car firms are greedy.
• B)without profitability the UAW will be unable to negotiate high enough wage rates for its members.
• C)without a focus on profitability, Chrysler will either be eliminated from the market or taken over by another firm.
• D)without a focus on profitability, Chrysler will face an unreasonably high implicit rental rate.
• E)without profitability, Chrysler will not have enough money for research and development.

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Definitions:

Direct Labor-Hours

A measure of the work done by production workers, calculated in hours.

Variable Overhead

Variable overhead refers to costs that change in proportion to the production activity or business operations levels, such as utilities or materials.

Direct Materials

Ingredients that are identifiable in the production process of a product and serve as fundamental elements of the end product.

Direct Labor-Hours

The overall hours dedicated by workers who are directly contributing to the production line.