When a Chain Retailer Bypasses a Wholesaler by Performing Several

question 26

True/False

When a chain retailer bypasses a wholesaler by performing several wholesale functions,an independent vertical marketing system is utilized.

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Definitions:

Actual Overhead

includes the real, as incurred, indirect costs associated with manufacturing a product or providing a service, including utilities and rent.

Cost Allocation

The process of assigning indirect cost to a cost object, such as a job.

Factory Overhead

The indirect costs associated with manufacturing, including utilities, maintenance, and salaries of employees not directly involved in production.

Cost Object

The object or segment of operations to which costs are related for management’s use, such as a product or department.