The Purchasing Manager Was Able to Bring Down the Cost

question 158

Multiple Choice

The purchasing manager was able to bring down the cost of direct materials by purchasing direct materials of a slightly lower grade quality than the company had used previously.The lower grade of direct materials,however,meant a higher defect rate on the assembly line and a higher waste of direct materials during production,which in turn lowered operating income.This situation would lead to a(n) ________.

• A) favorable direct materials cost variance
• B) unfavorable direct labor cost variance
• C) favorable direct labor efficiency variance
• D) favorable direct materials efficiency variance

Grasp the concept of product customization and its impact on consumer satisfaction.

Understand Amazon's strategies for avoiding common distribution problems.

Identify effective competitive strategies for wholesalers against Amazon Business.

Understand digital marketplaces and the behavior of showrooming.

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Definitions:

Checking Account

A bank account that allows for numerous withdrawals and deposits, often used by individuals for day-to-day financial transactions.

Credit Option

An agreement that gives the buyer the right, but not the obligation, to borrow funds or extend credit under specified conditions.

M3

M3 is a measure of the money supply that includes M2 (cash, checking deposits, and easily convertible near money) plus large time deposits, institutional money market funds, and larger liquid assets.

Reserve Ratio

A regulation set by central banks determining the minimum amount of reserves that must be held by a commercial bank, expressed as a percentage of the bank's total deposits.