Which of the Following Statements Regarding Cost-Savings Sharing Is False

question 75

Multiple Choice

Which of the following statements regarding cost-savings sharing is false?

• A)Cost-sharing approaches require joint identification of the full cost to produce an item.
• B)Profit is a function of the productive investment committed to the purchased item and a supplier's asset return requirements.
• C)The cost-based approach provides a supplier with incentives to pursue continuous performance improvement to realize shared cost savings and invest in productive assets.
• D)Profit is a direct function of cost.
• E)In the traditional market-based pricing approach, one party (usually the purchaser) seeks to capture all cost savings resulting from a supplier's improvement effort.

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