When Trying to Estimate the Purchases of a Potential Business

question 113

True/False

When trying to estimate the purchases of a potential business customer, it is reasonable to suppose that there is a relationship between the size of the potential customer's purchases and a variable such as the number of personnel employed by the customer.

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Definitions:

Special Discounted Price

A reduced price offered on goods or services, lower than the standard charge to promote sales.

Variable Selling

Refers to costs that vary directly with the level of sales, such as commissions or shipping fees.

Idle Capacity

The portion of a company's resources, such as labor or machinery, that is not being used to its full potential during the production process.

Joint Processing Costs

The expenses incurred during the initial stages of processing where multiple products are produced simultaneously before they are split into separate components.