Which of the Following Represent Potential Gains from an Acquisition

question 8

Multiple Choice

Which of the following represent potential gains from an acquisition?
I.the replacement of ineffective managers
II.lower costs per unit produced
III.an increase in firm size so that diseconomies of scale are realized
IV.spreading of overhead costs

• A)II and III only
• B)I and IV only
• C)I, II, and IV only
• D)I, III, and IV only
• E)I, II, III, and IV

---

Definitions:

Estimated Total Overhead

The anticipated amount of all overhead expenses for a specific period, used for budgeting and costing purposes.

Machining Department

A specific division within a manufacturing facility where machinery is used to process materials into finished products.

Manufacturing Overhead

All indirect costs associated with the production process of a company, such as utilities, depreciation, and salaries for management.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products based on a particular activity base, such as labor hours or machine hours.