When Trek Orders a Seat or Saddle for One of Its

question 87

Multiple Choice

When Trek orders a seat or saddle for one of its models that has a slightly different material for the cover only, but the other components are the same as existing saddles used on other bikes, this purchase situation is known as a

• A) new buy.
• B) straight rebuy.
• C) standard reorder.
• D) modified rebuy.
• E) make-buy.

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Definitions:

CVP Analysis

Cost-Volume-Profit Analysis, a method used in managerial accounting to understand the impact of varying levels of costs and volume on operating profit.

Variable Cost

Expenses that vary directly with the amount of products or services a company generates.

Fixed Costs

Costs that remain constant regardless of a company's level of activity, including expenses like rent, salaries, and insurance.

Profit

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.