When a Company Increases Its Growth Rate by Taking Goods

question 8

Multiple Choice

When a company increases its growth rate by taking goods or services developed at home and selling them internationally,it is

• A)leveraging its existing products.
• B)taking the path of least resistance.
• C)engaging in product positioning.
• D)realizing cost economies from global expansion.
• E)realizing location economies.

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Definitions:

Sales Variance

Captures the effect of quantity sold holding the mix of products sold constant.

Overhead Variances

The difference between actual overhead costs incurred and the standard or budgeted overhead costs.

Variable Overhead

The indirect expenses that fluctuate with the level of production activity, such as utilities for the manufacturing plant.

Overhead Absorption Rate

Budgeted overhead divided by budgeted volume. Also called overhead application rate.