Which of the Following Is TRUE

question 134

Multiple Choice

Which of the following is TRUE?

• A) Conglomerates no longer exist in the U.S. business scene, but are common in emerging markets.
• B) Unrelated diversified firms seek to create value through economies of scope.
• C) The sharing of intangible resources, such as know-how, between firms is a type of operational sharing in related diversifications.
• D) Related constrained firms share more tangible resources and activities between businesses than do related linked firms.

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Definitions:

Unit Product Cost

The total cost associated with producing one unit of a product, including direct materials, direct labor, and allocated overhead.

Segmented Income Statement

An income statement that separates costs and revenues into different segments, departments, or divisions of a business.

Contribution Approach

An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated into product and period costs for external reporting purposes.

Manufacturing Overhead

All indirect costs related to manufacturing that cannot be directly traced to specific items produced, such as factory rent, utilities, and equipment depreciation.