Campbell Soup Recently Joined Forces with Hong Kong-Based Swire Pacific

question 32

Multiple Choice

Campbell Soup recently joined forces with Hong Kong-based Swire Pacific to form an entity called Campbell Swire to better distribute the company's soups in China. This is an example of ________.

• A) licensing
• B) contract manufacturing
• C) management contracting
• D) joint ownership
• E) indirect exporting

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Definitions:

Direct Materials

Raw materials that can be directly traced to the production of a specific product.

Materials Price Variance

The difference between the actual cost of raw materials and the expected cost at standard prices.

Standard Quantity

The expected or predetermined amount of materials or input needed to produce a single unit of product, used for manufacturing budgeting and variance analysis.

Standard Price

A predetermined cost that companies use for budgeting and assessing the performance of actual costs.