A Sneaker Company Creating Its Own Stores Where It Sells

question 40

Multiple Choice

A sneaker company creating its own stores where it sells only its own brand is an example of which of the following?

• A)forward vertical integration
• B)backward horizontal integration
• C)forward horizontal integration
• D)reverse vertical integration

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Definitions:

Estimated Total Manufacturing Overhead

The anticipated total costs associated with the indirect expenses of producing goods, such as utilities and rent for the manufacturing facility.

Job-Order Costing System

An accounting method that assigns costs to specific production jobs or batches and is used when the products produced are sufficiently distinct from each other.

Predetermined Overhead Rate

A rate calculated before the fiscal year begins, used to estimate the manufacturing overhead for each unit of production.

Machine-Hours

A measure of production output or activity based on the number of hours machinery is operated.