The Fairest Possible Means of Treating All Suppliers Alike in a Competitive

question 2

Multiple Choice

The fairest possible means of treating all suppliers alike in a competitive bidding situation is to:

• A)establish a policy of firm bidding.
• B)allow all bidders to change their bids prior to the bid opening.
• C)allow for negotiation after all bids are received.
• D)give prospective suppliers target cost.
• E)none of the above because competitive bidding is not fair.

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Definitions:

Cost of Goods Sold

The total cost of manufacturing or acquiring the products sold by a company during a specific period.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, prior to any purchases or sales being recorded.

Ending Inventory

The value or volume of inventory remaining at the end of an accounting period after sales and adjustments.

Average Inventory

The mean stock held by a company over a certain period, calculated by adding the beginning and ending inventory and then dividing by two.