Entrepreneurial Firms That Pursue a Low-Cost Leadership Strategy Use All

question 28

Multiple Choice

Entrepreneurial firms that pursue a low-cost leadership strategy use all the following to achieve lower costs except

• A) cost-saving technology.
• B) simple organizational structures.
• C) rapid decision making.
• D) extensive investment in order to achieve economies of scale.

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Definitions:

Raw Material Costs

The expenses associated with the acquisition of raw materials used in the production of goods.

Labor Costs

The total sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes incurred by an employer.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to utilities, maintenance, and salaries of supervisory personnel.

Manufacturing Inventories

Manufacturing inventories consist of raw materials, work-in-process items, and finished goods that are held by a company in the course of producing its products.