A Condition Under Which a Supplier Appearing on the Customer

question 12

Multiple Choice

A condition under which a supplier appearing on the customer 's "OK to buy from" list would not be issued an order would be:

• A) Item needed is not available from any of OK'd suppliers. II. Supplier 's quality rating has dropped below acceptable standards on last two shipments. III. OK'd supplier does not have the capacity to fulfill the customer 's demands for the item needed. IV. One or more factors from the selection criteria will not now be met by the supplier.
• B) I and III only
• C) I and II only
• D) I, II, and III only
• E) I, II, III, and IV

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Definitions:

Variable Cost Ratio

A measure of a company's variable costs as a percentage of sales, which shows the proportion of sales that is consumed by variable costs.

Profit-Volume Ratio

A measure that illustrates how profits will change with a change in volume, showing the relationship between profit and sales levels.

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in total with the level of activity but having a portion that remains constant.

Variable Cost

Costs that vary directly with the level of production or service activity.