Licensing Would Be a Good Option for Firms in Which

question 60

Multiple Choice

Licensing would be a good option for firms in which of the following industries?

• A) High-technology industries in which protecting firm-specific expertise is of paramount importance.
• B) Global oligopolies, in which competitive interdependence requires that multinational firms maintain tight control over foreign operations.
• C) Industries in which intense cost pressures require that multinational firms maintain tight control over foreign operations.
• D) In fragmented, low-technology industries in which globally dispersed manufacturing is not an option.

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Definitions:

Absorption Costing

A method of product costing that captures all costs associated with manufacturing a product, including overhead expenses.

Variable Production Costs

Variable production costs fluctuate with the level of production output and include expenses like raw materials and labor directly tied to the production process.

Absorption Costing

A system in accounting that compiles all the expenses tied to production, such as direct material costs, direct labor payments, and both styles of manufacturing overhead, fixed and variable, and applies them to the price of a product.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production, such as rent for the manufacturing facility or salaries of permanent staff.