Cost and Works Accounting 1

Q 1. Purchase Budget has an impact on

(A) Profitability of the company
(B) Materials Budget of the company
(C) Bill of materials
(D) All of these
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Q 2. “Hedging” technique is used

(A) When there is an organized commodity market
(B) Where large quantities of a particular commodity are bought and sold
(C) Both (a) and (b)
(D) None of these
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Q 3. JIT contributed to the

(A) Reduced inventories and WIP
(B) Reduced suppliers and vendors
(C) Reduced information flows
(D) Reduced manpower planning
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Q 4. The objective(s) of forward purchasing is / are

(A) To guard against interruption in supply
(B) To economize the use of storage space
(C) To guard against the future rise in price
(D) All of these
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Q 5. The purchase order form is designed by

(A) Materials Manager
(B) Purchase Manager
(C) Marketing Manager
(D) None of them
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Q 6. Which of the following is not a function of purchasing management?

(A) Selecting the source
(B) Placement of purchase order
(C) Physical controls of material
(D) None of these
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Q 7. Which one of the following is not included in the 5 R in purchasing?

(A) Quality
(B) Quantity
(C) Price
(D) None of these
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Q 8. A bilateral RFP is preferred to an invitation to bid when:

(A) Supplier and terms are specified
(B) The product or service is relatively low value and readily available
(C) The product or service has high value and is unique
(D) The product or service has high value, but is easy to obtain
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Q 9. Definitive contract terms are spelled out in the:

(A) Pre-award phase
(B) Award phase
(C) Post-award phase
(D) Purchasing phase
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Q 10. The contract is signed at the end of the:

(A) Pre-award phase
(B) Award phase
(C) Post-award phase
(D) Award cycle
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