Answered: Buyers negotiate purchase contracts…

Buyers negotiate purchase contracts with suppliers. What type of shipping terms should a buyer attempt to negotiate to minimize freight-in costs?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 10DQ: When using the negotiated price approach to transfer pricing, within what range should the transfer...

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Similar questions

what is the effect on transportation costs if the purchaser controls a shipment directly from the supplier instead of having the supplier arrange shipment? What is the effect on transportation costs because of longer distances?
What are the possible problems associated with receiving goods ordered from a vendor/supplier?
Explain how negotiation between the supplying and buying units may be used to set transfer prices. How does this relate to the general transfer pricing rule?
Who is responsible for the freight cost when the terms are FOB destination? Please explain with full explanation. a. the seller b. the buyer c. the customer d. either the buyer or the seller
Conceptually, how would you evaluate a quantity discount offerfrom a supplier?
The buyer should be responsible for the freight (legally) but the seller paid for it A. FOB shipping point, freight prepaid B. FOB shipping point, freight collect C. FOB destination, freight prepaid D. FOB destination, freight collect
A transfer pricing arrangement that uses the price that would be charged to an external customer is a______. A. market-based approach B. negotiated approach C. cost approach D. decentralized approach
A transfer pricing structure that considers the opportunity costs of selling to internal rather than external customers uses_______. A. the cost approach B. the general transfer pricing approach C. the market-based approach D. the opportunity cost approach
Which of the following is not a characteristic of FOB Shipping Point? A. The buyer pays for shipping. B. The buyer owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
Which of the following is not a characteristic of FOB Destination? A. The seller pays for shipping. B. The seller owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
If goods are shipped FOB destination, which of the following is true? A. Title to the goods will transfer as soon as the goods are shipped. B. FOB indicates that a price reduction has been applied to the order. C. The seller must pay the shipping. D. The seller and the buyer will each pay 50% of the cost.