Which Approach Is Likely to Be Used for Leverage Purchases

question 21

Multiple Choice

Which approach is likely to be used for leverage purchases?

• A)Purchasing cards
• B)Vendor-managed inventory
• C)Using executive champions
• D)Standardizing purchases

Comprehend the concept of master budget and its application in budgetary control.

Differentiate between static and flexible budgets and their uses in managing costs.

Identify the role of flexible budgets in performance evaluation and control.

Recognize the importance of comparing actual results with budgeted objectives for effective budgetary control.

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Definitions:

Short Run

A period in which at least one factor of production is fixed, limiting the ability of a firm to adjust to changes in market demand or supply.

Long-Run Industry

A period in which all factors of production and costs can be variable, allowing for adjustment to changes in market conditions.

Zero-Profit Equilibrium

A situation where a firm's total revenues exactly equal its total costs, resulting in no economic profit.

Entry

The act of entering or moving into a market or area of business to start operations or activities.