Which One of the Following Statements Correctly Represents a Benefit

question 4

Multiple Choice

Which one of the following statements correctly represents a benefit of centralized buying?

• A) Local managers have more control over their business.
• B) Purchases and production schedules are meshed more easily.
• C) Purchasing lead times may be shorter.
• D) Increased buying power can result in significant savings in purchasing costs.

Grasp the concept and importance of zero-based budgeting in financial planning.

Learn the implications of production and labor budgeting on overall financial planning and operational efficiency.

Understand the process of budget preparation for for-profit organizations, including forecasting of cash receipts and disbursements.

Ability to perform budget calculations for specific items like manufacturing overhead, selling, and administrative expenses.

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Definitions:

Merchandising Firm

A business that purchases finished goods for resale in order to make a profit, differentiating itself from manufacturing firms and service firms.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; a measure of profitability.

Total Cost of Goods Sold

The sum of all costs directly involved in producing or purchasing products sold by a company during a given period.