The Savvy Entrepreneurial Firm Feature in Chapter 7 Focuses on Globat.com

question 10

Multiple Choice

The Savvy Entrepreneurial Firm feature in Chapter 7 focuses on Globat.com, a Web hosting company, which encountered a crisis described in the feature. The main point of the feature was to illustrate that the manner in which a company handles a crisis:

• A) has a bearing on its ability to develop high quality business partnerships
• B) provides an important standard for how it handles crises in the future
• C) limits its legal liability
• D) limits or contains the damage to its brand
• E) sends a message to its customers regarding its values and trustworthiness

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Definitions:

Machine-Hours

A measure of the amount of time machines are used in the production process, often used as a basis for allocating manufacturing overhead.

Overhead Cost

Expenses related to the ongoing operation of a business that cannot be directly traced to a specific product or service, like rent, utilities, and insurance.

Activity-Based Costing

A method of costing that apportions overhead and indirect expenditures to products and services related to the activities they entail.

Machine-Hours

A unit of measure representing the operation of machinery or equipment for one hour, often used in allocating manufacturing overhead costs based on actual or budgeted machine usage.