A Problem with the Rapidly Expanding Use of E-Purchasing Is

question 13

Multiple Choice

A problem with the rapidly expanding use of e-purchasing is that it ________.

• A)can erode established customer-supplier relationships
• B)saves less time than expected
• C)generates more transactions to document
• D)generates less cost savings than predicted
• E)reduces the amount of time purchasing people can spend on strategic issues

Understand the concept and importance of cost drivers in managing activities and costs.

Understand the concept and application of normal costing in manufacturing processes.

Analyze and calculate under or overapplied overhead based on different capacity measures.

Recognize the importance and mechanics of cost allocation in accounting and management.

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Definitions:

Average Total Cost

Average total cost is the total cost of production divided by the total quantity produced, representing the cost per unit of output.

Marginal Cost

The swell in aggregate expenditure tied to the creation of an extra unit of a product or service.

Average Variable Cost

The variable cost (cost that changes with production volume) per unit of output, calculated by dividing total variable costs by the number of units produced.

Profit-Maximizing Level

The point of operation where a business can achieve the highest profit, typically determined by analyzing costs and revenue.