The Buying of Products or Services from a Third Party

question 14

Multiple Choice

The buying of products or services from a third party to manage a business's functions is known as:

• A)asset efficiency.
• B)diversification of supplies.
• C)importing.
• D)outsourcing.

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Definitions:

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Cost Behaviour

The way in which a cost changes or reacts in relation to changes in business activity levels.

Variable Selling Expenses

Sales-related costs that vary directly with the volume of sales, such as commissions and shipping charges.

Contribution Approach

An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated according to organizational functions.