A Wholly Owned Subsidiary Is Appropriate When the Firm Wants

question 23

Multiple Choice

A wholly owned subsidiary is appropriate when the firm wants

• A) to share the cost and risk of developing a foreign market.
• B) 100 percent of the profits generated in a foreign market.
• C) a plant that is ready to operate.
• D) to test a market.

Understand the contribution approach to income statements and its importance in managerial decision-making.

Assess the effect of activity level changes on total costs, net income, and cost per unit.

Estimate expected costs based on historical data using linear cost behavior assumptions.

Understand how to apply the high-low method to determine variable and fixed cost components.

---

Definitions:

Position

Refers to the location of an element or feature in a manufactured part, often defined in terms of coordinates or relation to other features.

Actual Size

Actual size refers to the true dimensions of an object or part, without any allowances, tolerances, or scaling applied.

Size Limits

Refers to the maximum and minimum dimensions allowable for a manufacturing part or material.

Characteristic Symbol

A symbol assigned to specific features in technical drawings or diagrams to represent the type of characteristic or tolerance specified.