Which of the Following Is a Disadvantage of Exporting

question 15

Multiple Choice

Which of the following is a disadvantage of exporting?

• A)The firm incurs the costs of establishing manufacturing operations in the host country.
• B)It does not give a firm any control over manufacturing,marketing,and strategy.
• C)High transport costs can make exporting uneconomical.
• D)The firm cannot use countertrading options such as offsets.

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) to produce a unit of product, used for setting prices and analyzing efficiency.

Absorption Costing

An accounting method where all manufacturing costs, including both variable and fixed costs, are allocated to produced units, thus ‘absorbing’ them.

Unit Product Cost

The total cost associated with producing a single unit of a product, calculated by dividing the total production costs by the number of units produced.

Net Operating Income

A measure of a company's profitability calculated by subtracting operating expenses from operating revenues, excluding non-operating income and expenses.