The Mission of the ________ Is Collectively to Analyze and Focus

question 23

Multiple Choice

The mission of the ________ is collectively to analyze and focus a value stream so that it does everything involved in supplying a good or service in a way that provides maximum value to the customer.

• A)buying center
• B)lean enterprise
• C)buying group
• D)supply manager

Analyze make-or-buy decisions by identifying and calculating relevant costs.

Understand and apply the target costing approach to product pricing.

Define and identify variable and fixed costs and their relevance to product decisions.

Calculate the total contribution margin and apply the concept of constrained resources to maximize profitability.

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Definitions:

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced.

Variable Cost

A cost that changes with the level of output or production.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.

Marginal Costs

refers to the cost associated with producing each additional unit of a product or service.