Which of the Following Is NOT a Potential Disadvantage of Licensing

question 19

Multiple Choice

Which of the following is NOT a potential disadvantage of licensing relative to FDI?

• A)Possible loss of quality control.
• B)Establishment of a potential competitor in third-country markets.
• C)Possible improvement of the technology by the local licensee, which then enters the original firm's home market.
• D)All of the above are potential disadvantages to licensing.

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Definitions:

Work in Process

The goods in production that are not yet completed, representing a stage between raw materials and finished goods.

Underapplied

A situation in cost accounting where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Overapplied

Refers to a condition where the overhead costs allocated exceed the actual costs incurred, similar to overapplied overhead but more general.

Manufacturing Overhead

Indirect costs related to manufacturing that are not directly tied to a specific product, like maintenance, utilities, and management salaries.