When a Company Is Successful in Pursuing the Strategy of Concentration

question 25

True/False

When a company is successful in pursuing the strategy of concentration on a single industry, it uses its divisional skills to develop new products or expand its locations.

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Definitions:

Conversion Costs

The total expenses of direct labor together with manufacturing overheads spent in transforming raw materials into completed products.

Process Cost Accounting System

A bookkeeping mechanism for distributing costs among similar items that are produced in large scale and without interruption.

Equivalent Units of Production

A concept in cost accounting used to assign costs to partially completed goods, calculated by taking the number of units in the production process and converting them into a number of completed units.

Conversion Cost

The combined total of labor and manufacturing overhead costs necessary to convert raw materials into finished products.