Green Lumber Supply Noticed a Recent Decline in the Amount

question 104

Multiple Choice

Green Lumber Supply noticed a recent decline in the amount of purchases from a key customer.Worried that other customers might also reduce their purchases,Green's management decided to evaluate the cost of its delivery service.Which of the following cost drivers is more appropriate for general administrative costs of the Delivery Department?

• A)Number of different items ordered.
• B)Value of each order.
• C)Total number of items in each order.
• D)Number of deliveries made.

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Definitions:

Total Demand

The entire quantity of a product or service that consumers in a market are willing and able to purchase at various prices.

Marginal Revenue

The additional revenue that a firm receives from selling one extra unit of a product or service.

Demand Schedule

A Demand Schedule is a tabular representation of the relationship between the price of a good or service and the quantity demanded by consumers, underlining the law of demand.

Patents

Legal documents granting an inventor exclusive rights to produce, use, and sell an invention for a certain number of years.