If a Purchasing Agent Is Able to Negotiate a Price

question 181

Multiple Choice

If a purchasing agent is able to negotiate a price lower than that set by the current budget by purchasing direct materials of similar quality

• A)a reduction in customer service costs will result.
• B)the effect on the direct materials efficiency variance will be favourable.
• C)the effect on the direct labour efficiency variance will be favourable.
• D)the effect on the purchase rate variance will be favourable.
• E)the effect on the direct materials efficiency variance will be unfavourable.

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Definitions:

Long-Term Equipment Lease

A long-term equipment lease is a contractual agreement allowing a business to use equipment for a prolonged period in exchange for regular payments.

Management Training Seminars

Educational sessions focused on improving managerial skills and competencies, often including leadership, communication, and strategic planning topics.

Cost Behavior

The way in which costs change in relation to changes in a company's level of activity, categorized into fixed, variable, and mixed costs.

Cost Items

Specific expenses incurred in the production or delivery of goods and services, including materials, labor, and overhead costs.