When There Are Economies of Scope Between Two Products Which

question 30

Multiple Choice

When there are economies of scope between two products which are separately produced by two firms,merging into a single firm can:

• A) accomplish an increase in sales.
• B) accomplish a reduction in costs.
• C) lead to an increase in cost.
• D) lead to a reduction in sales.

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Definitions:

Completed During Period

Refers to activities, projects, or production that have been started and finished within a specific timeframe, often relating to manufacturing or project management.

Job Order Manufacturing

A production system in which goods are manufactured based on specific customer orders, allowing for customization of products.

Process Manufacturing

A production method that produces goods by combining supplies, ingredients, or raw substances using a formula or recipe, often resulting in a batch of finished goods.

Equivalent Units

A method in cost accounting to express the amount of work done by incomplete processes in terms of fully completed units.