If All the Businesses in Which a Firm Operates Share

question 11

True/False

If all the businesses in which a firm operates share a significant number of inputs, production technologies, distribution channels, similar customers, and so forth, this corporate diversification strategy is called related-constrained diversification.

---

Definitions:

Standard Variable Overhead Rate

The predetermined rate at which variable overhead costs are applied to production activities, based on an expected level of activity.

Actual Total Variable Overhead Cost

The actual incurred costs that vary with production volume, such as raw materials and direct labor.

Labour Efficiency Variance

The difference between the actual labor hours worked and the standard labor hours set for the level of production achieved.

Standard Labour Hours

The estimated hours required to produce a unit of product, used in planning and efficiency analysis.