Scenario: Global Manufacturing,Inc.(GMI) GMI Is a Fast-Growing Canadian Company That Wants a Production

question 77

Multiple Choice

Scenario: Global Manufacturing,Inc.(GMI)
GMI is a fast-growing Canadian company that wants a production system that makes each of its product's two components in the location where the cost of production is lowest.The components will then be taken to maquiladoras for final assembly.GMI purchased an existing company in Brazil to produce component A and built a subsidiary in Thailand to produce component B.
-GMI's investments are examples of ________.

• A)foreign direct investment
• B)portfolio investment
• C)merger
• D)horizontal integration

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Definitions:

Material Costs

Material Costs are the expenses incurred for the materials that are used in the production process of goods or services.

First-In, First-Out

An inventory valuation method which assumes that the first items purchased or manufactured are the first ones sold.

Work In Process

Items that are in the process of being produced but are not yet finished goods.

Direct Materials

Raw materials used directly in the production of a product, whose costs are easily traced to that product.