Collaborative Relationships Are Becoming a Common Way to Meet the Demands

question 72

Multiple Choice

Collaborative relationships are becoming a common way to meet the demands of global competition.Global __________ are agreements between two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation.

• A)compacts
• B)collaborative treaties
• C)free trade agreements
• D)economic coalitions
• E)strategic alliances

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Manufacturing Margin

The difference between the cost of goods sold by a manufacturing company and its total sales, reflecting the gross margin specific to manufacturing operations.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of goods sold.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed overhead.