Which of the Following Best Explains 'Cost Avoidance

question 20

Multiple Choice

Which of the following best explains 'cost avoidance'? 

• A) The variance between the historical and the actual purchase price paid per unit. 
• B) The reduction on costs against planned costs. 
• C) The total purchasing budget savings. 
• D) The purchasing savings budget for each item.

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Definitions:

United States

A country located in North America known for its significant economic, cultural, and military influence globally.

Principal-Agent Problem

A dilemma arising from conflicts of interest between a principal (e.g., an employer or shareholder) and an agent (e.g., an employee or manager) when the agent is motivated to act in his own best interests rather than those of the principal.

Banking Industry

A sector of the economy comprising institutions that offer financial services, such as deposit accounts, loans, and currency exchange.

United States

A country in North America consisting of 50 states, a federal district, five major self-governing territories, and various possessions.