Cho wanted to sell her custom jewelry made in China to the U. S. market, but she didn’t have a lot of capital to get started, nor did she know how to get around import restrictions. She decided to give an American company the rights to produce and sell her products for a fee and gave them patent rights. Cho was pursuing which entry method?

OPTIONS:

A. consortia  B. exporting arrangements  C. strategic alliances  D. joint ventures  E. licensing

E. licensing

Explanation:

Licensing is a type of business arrangement whereby a company grants permission or rights to another company to use their formula, processes, trademarks, patents or any other intellectual property, in the production of a product or service, for a specified period and payment.

Cho certainly was pursuing the entry method called licensing. Their patent rights is the intangible property that is given to an American company that gives them the rights or permission to produce and sell her products for a fee. Cho is the licensor, while the American company is the licensee.

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total