Driving-Forces Analysis Helps Managers Identify Whether

question 119

Multiple Choice

Driving-forces analysis helps managers identify whether

• A)the collective impact of the driving forces will act to increase/decrease market demand, increase/decrease competition, and raise/lower industry profitability in the years ahead.
• B)it will become more or less important to aim the company's strategy at being the industry's low-cost producer.
• C)the driving forces will have a bigger impact on company profitability than competitive forces.
• D)the industry is likely to become more or less vertically integrated and why.
• E)competitive advantages are likely to grow or diminish in importance.

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Definitions:

Indirect Labor

The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process.

Spending Variance

This refers to the difference between the budgeted amount of spending and the actual amount spent.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.