When Using Management by Exception,the Purchasing Manager Should Be Questioned

question 149

Multiple Choice

When using management by exception,the purchasing manager should be questioned for which of the following variances?

• A) direct materials efficiency
• B) variable overhead efficiency
• C) direct materials cost
• D) direct labor efficiency

---

Definitions:

Implicit Rate

The interest rate inherent in a lease, not explicitly stated, used to determine lease payments.

Incremental Borrowing Rate

The incremental borrowing rate is the interest rate a company would have to pay if it borrows additional funds.

Major Overhaul

Significant restorations or renovations to an asset, often extending its life or improving its efficiency.

Non-Cancelable

A contract or policy clause that safeguards against cancellation before a specified date, ensuring a degree of stability or guarantee.