The Approach Authorizing Major Suppliers to Make Purchases for Their

question 16

Multiple Choice

The approach authorizing major suppliers to make purchases for their own accounts, resulting in suppliers providing only what is needed when it is needed, is referred to as ________.

• A) single-source managed inventory
• B) vendor managed inventory
• C) account managed inventory
• D) cost managed inventory
• E) time managed inventory

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Definitions:

Predetermined Overhead Rate

An estimated charge used to allocate manufacturing overhead costs to individual products or job orders based on a predetermined activity base.

Machine-Hours

The total hours that machinery is operational and actively being used in the production process, often used as a basis for allocating manufacturing overhead.

Manufacturing Overhead

A rephrased description: Costs indirectly linked to the production of goods, such as maintenance, factory supplies, and quality control.

Unit Product Cost

The cost to produce a single unit of product, calculated by dividing the total production costs by the number of units produced.