Relying on Outsiders to Perform Certain Value Chain Activities Offers

question 3

Multiple Choice

Relying on outsiders to perform certain value chain activities offers such strategic advantages as

• A)ensuring more costly components or services.
• B)improving the company's inability to innovate by allying with "best-in-class" suppliers.
• C)reducing the company's risk exposure to changing technology and/or changing buyer preferences.
• D)increasing the firm's inability to assemble diverse kinds of expertise speedily and efficiently.
• E)reducing its information technology and operational costs so that organizational flexibility is maintained.

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Definitions:

Labor Price Variance

The difference between the actual cost of direct labor and the standard cost, typically associated with the rate paid for labor.

Labor Quantity Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard hourly wage rate.

Standard Costing System

A cost accounting system that assigns predetermined costs to products and services, used to plan budgets and assess performance by comparing actual costs against these standards.

Total Price Variance

The difference between the actual cost of a good or service and its expected cost based on standard pricing.