The Primary Objective of the Purchasing Function Is To

question 113

Multiple Choice

The primary objective of the purchasing function is to:

• A)ensure an adequate turnover of merchandise.
• B)acquire enough stock to ensure uninterrupted sales or production.
• C)determine the "best" possible price for both supplies and finished products.
• D)maximize carrying and set-up costs for the firm.

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Definitions:

Rate of Return

The increase or decrease in the value of an investment during a certain timeframe, represented as a percentage of the original investment's cost.

Markup Percentage

The percentage added to the cost of goods to cover overhead and profit, determining the selling price.

Factory Overhead

Costs associated with production that are not directly tied to individual products, including utilities, maintenance, and salaries of supervisory staff.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the amount of activities used to produce them.