A Comprehensive Evaluation of the Group of Businesses a Company

question 140

Multiple Choice

A comprehensive evaluation of the group of businesses a company has diversified into involves:

• A) evaluating the attractiveness of industries the company has diversified into and the competitive strength of each of its business units.
• B) evaluating the strategic fits and resource fits among the various sister businesses.
• C) ranking the performance prospects of the businesses from best to worst and determining what the corporate parent's priorities should be in allocating resources to its various businesses.
• D) using the results of the prior analytical steps as a basis for crafting new strategic moves to improve the company's overall performance.
• E) All of these.

---

Definitions:

Activity Variance

The difference between planned activity costs and actual activity costs in managerial accounting, used for budget control and performance evaluation.

Fixed Cost

Expenses that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance premiums.

Variable Cost

Expenditures that fluctuate with production output, including ingredients, packaging, and labor directly involved in production.

Vehicle Operating Cost

Expenses related to the operation of a vehicle, including fuel, maintenance, and repairs.