Firms Should Consider Developing Custom Software Only If

question 96

Multiple Choice

Firms should consider developing custom software only if

• A)it will be used for critical functions like accounts receivable.
• B)it will contribute to development of a significant competitive advantage.
• C)the firm has the necessary expertise available in-house.
• D)the available canned software is very expensive.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their use of activities.

Direct Labor Rate

Direct labor rate is the amount paid per hour or unit of work to employees who are directly involved in the production of goods or services.

Direct Materials Cost

The cost of raw materials and components that are directly used in the manufacture of a product.

Traditional Costing

A costing methodology that allocates overhead costs based on a single, volume-based cost driver, often used in less complex manufacturing environments.