What Is the Advantage of Using Multiple Sources of Supply

question 56

Multiple Choice

What is the advantage of using multiple sources of supply?

• A) During shortages better services can be received.
• B) Discounts can be obtained with low-volume buying.
• C) The cost of ordering is low.
• D) Greater variety of goods can be obtained.

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Definitions:

Favorable Spending Variance

A situation where the actual spending is less than the budgeted or expected amount.

Indirect Materials

Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.

Flexible Budget

A budget that varies or adapts based on fluctuations in activity or volume levels.

Indirect Materials Cost

The cost of materials used in the production process that cannot be directly traced to the product, such as lubricants and cleaning supplies.