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:

Executrix

A female executor; a woman appointed by a will to execute the will's terms and administer the estate of the deceased.

Written Promise

A written promise is a documented commitment by one party to perform or refrain from performing specified actions.

Course of Dealing

A sequence of previous conduct between parties to a contract that establishes a common basis for their understanding.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.