Small Suppliers

question 10

Multiple Choice

Small suppliers:

• A) are most suited for large dollar value "A" requirements.
• B) usually represent very low risk to the purchaser.
• C) tend to have a strong financial base.
• D) often provide the greatest responsiveness and flexibility.
• E) tend to have an extensive management structure.

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Definitions:

LIFO Inventory

A method of inventory valuation where the most recently produced or acquired items are recorded as sold first, standing for Last In, First Out.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Variable Costing

A costing approach where variable costs are assigned to inventory and fixed costs are treated as expenses in the period they are incurred, focusing on the costs that change with production levels.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.