Apple,IncCustom Orders the Manufacture of Microprocessors for Its IMac,iPhone,and IPad

question 23

Multiple Choice

Apple,Inc.custom orders the manufacture of microprocessors for its iMac,iPhone,and iPad.For example,Intel makes chips for the iMac and Samsung produces Apple-designed chips for the iPhone and iPad.These two suppliers in turn rely on components from their own subcontracted suppliers.The suppliers involved in making and delivering microprocessors have adopted mutually beneficial objectives and strategies that ultimately give Apple's customers value for their money.Apple's method of doing business this way is an example of a(n)

• A)symbiotic partnership.
• B)make-buy decision.
• C)reciprocal agreement.
• D)supply partnership.
• E)exclusive dealing.

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Definitions:

Accounts Receivable

Amounts owed to a company by customers for goods or services provided on credit.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Depreciation Expense

The allocated portion of the cost of a tangible or physical asset that is charged as an expense over its useful life.

Operating Activities

Activities directly related to the business's primary operations, such as selling products or services, which are reflected in the company's cash flow.