Donna Karan Designs Is Trying to Decide If It Should

question 39

Multiple Choice

Donna Karan Designs is trying to decide if it should open its own stores instead of just designing women's clothing.Which type of growth strategy would this be classified as?

• A) related diversification
• B) forward integration
• C) unrelated diversification
• D) backward integration

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, like maintenance, utilities, and quality control.

Predetermined Overhead Rate

An estimated overhead rate used to allocate manufacturing overhead costs to products, calculated prior to the accounting period.

Direct Labour Hours

The cumulative hours employees spend that are directly linked to the manufacturing of goods or the provision of services.

T Accounts

T accounts are a visual aid in accounting to represent general ledger accounts, showing debits on the left side and credits on the right, to track financial transactions.