Under a Distributorship

question 12

Multiple Choice

Under a distributorship:

• A) the distributor, like an agent, does not take title to the merchandise it receives.
• B) the producer bears many of the risks connected with commercial sales.
• C) both the producer and the distributor must take special care to ensure that the arrangement does not violate the antitrust laws of their respective governments.
• D) multinational enterprises wishing to exploit an intellectual property right sell to a foreign company the right to use such property.

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Definitions:

Planning Budget

A financial plan that estimates income, expenses, and resources over a period, often used for guiding management decisions.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Fixed Cost

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable cost scenarios.