Johnson Company Makes Widgets, Which It Then Sends to Smith

question 10

Multiple Choice

Johnson Company makes widgets, which it then sends to Smith Company. Smith Company puts the widgets in packages. Smith Company is considered by Johnson to be a:

• A)Critical customer.
• B)Upstream product supplier.
• C)Aftermarket supplier.
• D)Downstream product supplier.

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Definitions:

Operating Costs

Expenses associated with the ongoing operations of a business, such as wages, rent, and utilities, excluding costs linked to producing goods.

Computer System

An integrated set of hardware and software designed to process, manage, and store data.

Capital Cost Allowance (CCA)

A tax deduction in Canada that represents a business’s investment in depreciable property.

Earnings Before Interest And Taxes

A measure of a firm's profitability that includes all income and expense items except interest and income tax expenses.