Which of the Following Is a Step Taken by Automobile

question 136

Multiple Choice

Which of the following is a step taken by automobile companies in situations where either centralization or decentralization of production is not feasible?

• A) Outsourcing production to developing countries
• B) Inshoring production into the home country
• C) Selling product patents and technology to competitors
• D) Refraining from international trade
• E) Establishing top-to-bottom manufacturing operations

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Definitions:

Total Variable Costs

The sum of all costs that vary directly with the level of production or sales volume, such as materials and labor costs.

Variable Costing Income Statement

An income statement format that only includes variable costs as cost of goods sold and uses contribution margin to analyze profitability.

Absorption Costing Format

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Gross Margin

Gross margin is a company's net sales revenue minus its cost of goods sold, representing the efficiency of a company in managing its direct costs.