Which of the Following Is Not a Rationale That Purchasing

question 15

Multiple Choice

Which of the following is not a rationale that purchasing is a separate function in many organizations?

• A)Purchasing promotes efficiency and effectiveness.
• B)Purchasing eliminates potential favoritism.
• C)Purchasing reduces the opportunity for fraud.
• D)Purchasing decentralizes control.

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Definitions:

Reciprocal Services Method

An accounting method used to allocate costs in situations where support departments provide services to each other as well as to production departments.

Support Department Costs

Expenses associated with departments that do not directly generate revenue but provide essential services to other departments, like IT and HR.

Assembly Department

A section within a manufacturing plant where components are assembled into final products.

Practical Capacity

The maximum level of work that an organization can achieve under normal working conditions.