When a Firm Buys on the Marketplace What It Cannot

question 33

Multiple Choice

When a firm buys on the marketplace what it cannot make itself,the costs incurred are referred to as:

• A)switching costs.
• B)network costs.
• C)procurement.
• D)agency costs.
• E)transaction costs.

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Definitions:

Freight In

The cost associated with transporting goods from the supplier to the buyer, typically recorded as part of the inventory cost.

Cost of Merchandise Sold

The direct costs attributable to the goods sold by a company, including the cost of the material and labor directly used in creating the goods.

Merchandising Company

A business that purchases finished goods for resale, making a profit on the sales margin.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, highlighting revenue, expenses, and profits or losses.