Why do companies devote resources to a purchasing department? Could not individual departments make their own purchases more efficiently?
The purchasing function is extremely important to a business. The members of the department work closely with suppliers to assure that the goods ordered are appropriately selected, priced, and delivered. One of the tasks of purchasing is to monitor the performance of vendors and maintain an approved vendor list.
After a requesting department submits a purchase requisition, purchasing prepares a purchase order. Hence the authorization occurs outside of purchasing separate from the processing of the purchase. Significant separation of duties is built into this system: the same party cannot authorize and initiate the transaction. Purchasing employees cannot initiate a purchase. This could be a problem if vendors try to influence the purchasing staff for favorable treatment.
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When responding to a customer's request for an adjustment, it is usually sensible to assume that
A) if you handle the situation well, the customer will be even more loyal than before. B) the customer's account of the situation is exaggerated. C) the customer is hostile. D) the customer is trying to pull a fast one. E) the customer will no longer do business with you, even if you grant the request.
Which of the following is a common type of incentive compensation?
A) Health insurance B) Profit-sharing plans C) Pension plans D) Flexible spending programs
If variable costs per unit decreased because of a decrease in utility rates, the break-even point would:
A) decrease B) increase C) remain the same D) increase or decrease, depending upon the percentage increase in utility rates
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