If a Supplier's Product or Service Is Routine to the Buyer

question 12

True/False

If a supplier's product or service is routine to the buyer, it should be considered for supplier development.

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Definitions:

Activity Cost Pools

Aggregations of all the costs associated with a particular activity, used in activity-based costing.

Departmental Overhead Rates

Refers to the allocation of indirect costs to specific departments within a company, which is used for cost control and pricing decisions.

Machine Hours

A measure of production activity; the total hours that machines are operating in a manufacturing process.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process of a product.