When a Firm Decides to Move Away from Ownership of a Vertically

question 12

Multiple Choice

When a firm decides to move away from ownership of a vertically integrated production process and begins to purchase supplies or other services from other businesses,it is said to be:

• A)integrating downstream.
• B)integrating upstream.
• C)franchising.
• D)outsourcing.

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Definitions:

Avoidable Costs

Expenses that can be eliminated if a particular decision or activity is discontinued.

Time-Driven

Refers to a method or process that is triggered or determined by the passage of time.

Activity-Based Costing

A methodology for calculating costs that distributes overhead and indirect expenses to products and services relative to the activities they utilize.

Customer Cost Analysis

The process of analyzing the costs related to acquiring and serving a customer, often to determine profitability.