In Vertical Integration

question 32

Multiple Choice

In vertical integration,

• A) Employees work in an environment of formal rules, authority, reporting structures and special responsibilities
• B) A buyer reduces its dependence on the supplier by cultivating relationships with other exchange partners
• C) There is variation in delivery and parts performance
• D) Entails stretching the supplier coordination and management resources across two partners
• E) Formal efforts are made to obtain evidence of supplier capabilities and commitment

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Definitions:

Equivalent Units

A method used in process costing that converts partially completed units into a number of fully completed units.

Direct Materials Costs

The cost of raw materials that are directly used in the manufacture of a product.

FIFO Method

First-In, First-Out, an inventory valuation method where the first items purchased are the first ones to be removed from inventory.

Units Started and Completed

This term refers to items or products that begin and finish production within a specific accounting period, in the context of manufacturing or process accounting.