If General Motors (GM)purchases Borg-Warner Transmissions,and Borg-Warner Buys Trucks and Cars

question 191

Multiple Choice

If General Motors (GM) purchases Borg-Warner transmissions,and Borg-Warner buys trucks and cars from GM,they would be demonstrating which type of buyer-seller interaction?

• A)exclusive dealing
• B)supply partnerships
• C)tying arrangements
• D)noncompetitive bidding
• E)reciprocity

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of production volume, such as rent, salaries, and insurance premiums.

Direct Materials Price Variance

The difference between the actual cost and the standard cost of materials used in production, indicating how efficiently materials are being purchased.

Standard Price

Standard price is a predetermined cost assigned to materials and goods, used in budgeting and costing calculations.

Actual Price

The real price at which a transaction takes place, unaffected by any discounts or premiums.