In the WebHouse Example Included in Chapter 6, WebHouse Failed

question 4

Multiple Choice

In the WebHouse example included in Chapter 6, WebHouse failed because:

• A) it did not complete a feasibility analysis
• B) it did not write a complete business plan
• C) it couldn't motivate its suppliers or customers to participate at a sufficient scale to support the overhead of the business
• D) it charged too much for its services
• E) it failed to focus on developing a core strategy

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Definitions:

Materials Quantity Standard

The established amount of materials that should be used for the production of a unit of goods.

Labor Quantity Standard

The benchmark or established norm for the amount of labor input required to produce a certain amount of output, reflecting efficiency expectations.

Materials Price Standard

The predetermined cost of materials that should be incurred under efficient operating conditions.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate estimated overhead costs to products or services based on a chosen activity base.