Identify the Item Below That Is the Biggest Purchasing Function

question 9

Multiple Choice

Identify the item below that is the biggest purchasing function cost driver.

• A)the number of purchase requisitions processed
• B)the number of suppliers used
• C)the number of purchase orders processed
• D)the quantity of items ordered

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Definitions:

Controllable Overhead Variance

The difference between the actual overhead costs incurred that are directly manageable by a manager and the budgeted or standard overhead costs.

Direct Labor Hours

The total number of hours worked by employees directly involved in the manufacturing process.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor.

Controllable Variance

The difference between actual and expected amounts that can be directly managed or controlled by responsible individuals.