When a Buying Division Elects to Purchase from an Outside

question 136

Multiple Choice

When a buying division elects to purchase from an outside supplier,

• A)the impact on overall company profits is usually not considered in the decision.
• B)only fixed costs should be included in the decision analysis.
• C)the price from the outside supplier is likely to be more than the incremental cost to the supplying division.
• D)overall company profits should be enhanced.

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Definitions:

Infantile Distortions

Misinterpretations or misunderstandings of reality often exhibited by young children due to their developing cognitive abilities.

Information Processing Theories

A set of theories in psychology that focus on how individuals mentally process and manage information, emphasizing mechanisms such as perception, memory, and problem-solving.

Cognitive Development

The process of growth and change in intellectual capabilities such as thinking, reasoning, and understanding, through childhood and adolescence.

Developmental Changes

Refers to the physical, cognitive, and emotional growth that occurs across the human lifespan.