Which of the Following Is a Disadvantage of Growth by Means

question 4

Multiple Choice

Which of the following is a disadvantage of growth by means of external growth strategies?

• A) diversification of business risk
• B) economies of scale
• C) getting access to proprietary products or services
• D) reducing competition
• E) antitrust implications

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Definitions:

Labour Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the standard rate times the actual hours worked.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level, allowing for more accurate budgeting and analysis.

Standard Costing

A cost accounting system that uses pre-determined costs to value the cost of goods sold and assess the performance.

Labour Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected for the level of production achieved, often indicating productivity levels.