Which of the Following Is a Reason Why Firms Often

question 43

Multiple Choice

Which of the following is a reason why firms often overpay for the assets of an acquired firm?

• A)Studies supporting the rise of failed companies post acquisitions
• B)Evidence of high management turnover post acquisitions
• C)The success rate of acquisitions exceeding that of failures
• D)Interest of more than one party in acquiring a particular firm
• E)Inevitable clash between cultures of acquiring and acquired firms

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to products or services, based on a chosen activity base like labor hours or machine hours.

Direct Labor-Hours

The total number of hours worked by employees that are directly involved in the manufacturing process.

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to products or job orders, based on a projected level of activity.

Direct Labor-Hours

The total number of labor hours worked by employees who are directly involved in the manufacturing process.