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Exam CSCP topic 1 question 45 discussion

Actual exam question from APICS's CSCP

Question #: 45
Topic #: 1

[All CSCP Questions]

A manufacturer uses standard costing, and a potential supplier uses activity-based costing. This difference most likely will have implications for which of the following types of future decisions?

A. Price concessions
B. Make-or-buy
C. Distribution warehouse locations
D. Freight terms

Show Suggested Answer

Suggested Answer: B 🗳️

by [deleted] at Sept. 29, 2022, 8:53 p.m.

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Jayleo058

2 months ago

Selected Answer: B

B, because if the supplier is constantly changing their prices and the manufacturer stays consistent it will eventually need to consider if its more cost effective to produce in house rather than deal with fluctuations.

upvoted 1 times

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Yesssir

9 months ago

Selected Answer: A

Go for A since make/buy depends on TCO. Moreover, we should be concerned on the price by the supplier not their costing

upvoted 2 times

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[Removed]

1 year, 6 months ago

I will go A, since it will be more difficult to negotiate a price concession, if measured in activity based vs cost based.

upvoted 3 times

Apix1

1 year, 1 month ago

Answer is B, since you can't make an informed make/buy decision if both parties are measuring cost differently.