When a Company Contracts with Suppliers in Other Countries to Make

question 6

Multiple Choice

When a company contracts with suppliers in other countries to make the various inputs that go into its products or to assemble the final products to reduce costs,_________________ occurs.

• A) inverted sourcing
• B) power distance
• C) global outsourcing
• D) shared services
• E) global downsizing

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Definitions:

Direct Labor-hours

The total hours of labor directly involved in the production of goods or services.

Variable Manufacturing Overhead

comprises manufacturing costs that vary directly with the level of production, such as materials and labor.

Direct Labor-hours

The all-encompassing total of work hours by staff directly partaking in manufacturing roles.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard cost based on the actual level of activity output.