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In Its Attempts to Source the Best Raw Materials, Enfi

question 3

Multiple Choice

In its attempts to source the best raw materials, Enfi Computers, a computer manufacturer, has associated with thirty suppliers spread across fourteen nations. Microchips, an integral part of any computer, are procured exclusively from a supplier in a different country. Enfi Computers has obtained an approval for this no-bid contract from its government and protected its supplies from any potential modifications caused by competing suppliers. Enfi Computers has resorted to _____ for its supply of microchips.

Definitions:

Budgeted Contribution Margin Ratio

The projected ratio that represents the difference between sales revenue and variable costs, expressed as a percentage of sales revenue.

Service Industry

A sector of the economy that provides intangible goods or services to consumers, such as health care, education, and financial services.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the extent to which sales can drop before losses begin.

Budgeted Data

Financial forecasts and plans, including income and expenses, prepared in advance for a specific period.