Organizing Purchasing as a Profit Center Means That the Department

question 36

Multiple Choice

Organizing purchasing as a profit center means that the department would

• A) manage expenses but not generate profits.
• B) help other departments generate profits.
• C) generate profits but not worry about expenses.
• D) manage expenses and generate profit.

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Definitions:

Effective Capacity

The maximum output level a facility can reasonably sustain under normal operating conditions.

Actual Output

The real quantity of goods or services produced by a company or a production process, as opposed to planned or theoretical output.

Analysis

The process of examining data or details in order to understand or explain them, typically used to solve problems or make decisions.

Costs Equals Revenues

This refers to a break-even point where the amount of money a company makes from selling goods or services equals the amount it costs to produce them.