There Are Two Types of Monetary Costs Involved in the Purchase

question 2

Multiple Choice

There are two types of monetary costs involved in the purchase of any product: transactional costs and life-cycle costs. Which of the following best exemplifies a life-cycle cost in the purchase of an automobile?

• A) the actual purchase price
• B) state or local taxes
• C) anticipated repair expenses
• D) registration fees
• E) title fees

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Definitions:

MRP

Stands for Material Requirements Planning, a system for calculating the materials and components needed to manufacture a product.

Finished Assemblies

Finished Assemblies are completed products that have been assembled from individual components and are ready for sale or use.

Pegging

In material requirements planning systems, tracing upward in the bill of material from the component to the parent item.

Part Requirement

Specification or quantity of a component necessary for completing a manufacturing process or assembling a final product.