The Fact That a Large Company Can Enjoy Savings from Producing

question 43

Multiple Choice

The fact that a large company can enjoy savings from producing goods in high volume that are not available to a small company is called ________.

• A) economies of scale
• B) horizontal integration
• C) vertical integration
• D) economies of scope

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Definitions:

Budgeted Profit

The expected profit planned in a budget, calculated as anticipated revenues minus planned expenses.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Direct Labour

Direct labour refers to the work effort of employees directly involved in the production of goods or services, whose costs are directly attributable to specific units of production.

Inventory Level

The quantity of goods or materials on hand at a given time within a business.