Which of the Following Is Not an Example of a Defensive

question 25

Multiple Choice

Which of the following is not an example of a defensive move to protect a company's market position and restrict a challenger's options for initiating competitive attack?

• A) granting volume discounts or better financing terms to dealers/distributors and providing discount coupons to buyers to help discourage them from experimenting with other suppliers or brands
• B) signaling challengers that retaliation is likely in the event they launch an attack
• C) publicly committing the company to a policy of matching a competitors' terms or prices
• D) maintaining a war chest of cash and marketable securities
• E) challenging struggling runner-up firms that are on the verge of going under

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Definitions:

Direct Labor Cost

The cost of wages and other benefits for workers directly involved in the production process.

Variable Costing

An accounting method that only considers variable costs (costs that change with production volume) in product costing and in the calculation of net income.

Absorption Costing

A method of product costing that includes all manufacturing costs, both variable and fixed, in the cost of a product.

Direct Labor Cost

The wages and related benefits paid to workers who are directly involved in the production of goods or services.