Important Characteristics in Organizational Buying Include Which of the Following

question 122

Multiple Choice

Important characteristics in organizational buying include which of the following?

• A) Many of the goods purchased are raw and semifinished.
• B) A heavy emphasis is placed on maintaining standardization to keep costs down.
• C) Coupons and contests are the most frequent forms of promotion.
• D) A fixed, nonnegotiable price is the norm.
• E) Personal relationships are preferred to online buying over the Internet.

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Definitions:

Cost-volume-profit Analysis

A managerial accounting method used to estimate the impact of different levels of cost and volume on operating profit.

Mixed Costs

Expenses that have both fixed and variable components, changing in total with activity level but not directly proportional.

Variable Costs

Variable costs are expenses that change in proportion to the activity or volume of a business, such as raw materials and labor costs that vary with production levels.

Contribution Margin

Contribution margin represents the difference between sales revenue and variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.