Purchasing Ch.9
T/F: COD deliveries are to be encouraged because they usually result in the lowest AP prices
False
T/F: Price normally follows quality; higher quality is normally accompanied by a higher price
True
Under the cost plus purchasing arrangement, the purchase price is equal to the suppliers cost plus a negotiated markup. The cost is by the supplier may be referred to as the: a. landed cost b. actual cost c. edible-portion cost d. merchant fee
a. landed cost
Given the following data, calculate the approximate EP cost per pound. AP price per pound $2.98 edible your percentage 75% a.$3.97 b. $5.22 c. $3.79 d. $9.03
a.$3.97
And a pound of ground beef sells for $1.20 (AP). You are serving a 4 ounce cook portion (EP).Terrible year for the ground beef is 75%. What is your eat because for one serving? a. $0.34 b. $0.40 c. $0.80 d. $1.20
b. $0.40
Given the following data, computer severable portion cost for one serving. Ingredient vodka servable yield 90% serving size 65 mL AP price per 1.75 L bottle:$14.95 note: there are 1000 mL in a 1 L bottle a. $0.55 b. $0.62 c. $0.77 d. The answer cannot be computed with only the data provided
b. $0.62
If your bank pay 6% simple interest on deposits, approximately how much interest income will you lose if you take out money out of your bank account to pay a $12,000 bill one week before its due date? a. $11.58 b. $13.84 c. $72.00 d. None of the above
b. $13.84
If you purchase bacon at an AP price of $1.84 a pound, and it is cut into 80 slices per pound, how much does one serving of four slices cost? a. $0.10 b. $0.12 c. $0.41 d. $0.46
c. $0.41
If you purchase roast beef at an AP price of $2.49 per pound as an edible you above 83%, what would be the EP cost of a 6 ounce portion? a. $0.83 b. $0.98 c. $1.12 d.$2.49
c. $1.12
If a roast Capone has an AP price of $2.10 per pound and an edible yield percentage of 50%, it's EP cost per pound would be approximately a. $0.26 b. $1.05 c. $2.10 d. $4.20
d. $4.20
If the unit price is $6.75 and extension price is $1154.25, the number of units listed on the invoice should be a.227 b. 198 c. 149 d. 171
d. 171
A request for a credit memo should be prepared by the purchasing agent whenever the following occurs: a. There is a price discrepancy on the invoice from the order form b. Substituted products were delivered and did not meet specifications c. Some of the products were damaged in transit d. All of the above
d. All of the above
Another term for cash rebate is: a. Cash discount b. Paid out c. A credit slip d. Coupon refund
d. Coupon refund
T/F: A benefit of buying products in large volume packages is that they're more environmentally friendly however, they are more expensive than buying the same item in smaller packages
False
T/F: A disadvantage of paying bills two ladies that you will no longer be able to pay cash on delivery
False
T/F: A major objective of cash management is to pay your bills as quickly as possible
False
T/F: A promotional discount is usually granted by the supplier if the buyer agrees to pay cash on delivery for the shipment
False
T/F: One of the advantages of paying your bills with a credit card as a discount fee that you can recieve from the suppliers
False
T/F: One of the main advantages of receiving cash discounts is that they will allow the buyer to delay paying the bill until the following months
False
T/F: The majority of buyers will purchase entirely on the basis of AP price
False
T/F: hedging is used to reduce AP prices on all blanket orders for a full year
False
T/F: if pork chops to have an edible use of 12 ounces per AP pound can be purchased for $2.82 per AP pound, then the EP cost for a 10 ounce serving is $2.16
False
T/F: if the AP price for fresh carrots is $0.20 per pound, and the edible yield is 75%, then the EP cost per pound is $0.33
False
T/F: if the AP price per pound is $3.45 and the edible yield is 70%, the EP cost for a 24 ounce serving is approximately $7.85
False
T/F: in recessionary times it is more important to Lower the quality grade of items as opposed to raising prices because guests will be more worried about saving money then getting the Quality they expect
False
T/F: vendors prefer the line item purchasing technique when using competitive bids
False
T/F:a 'move list' of goods that are very popular due to their high quality and tend to sell out fast
False
T/F: A 'future's contract' is an agreement to purchase or sell a commodity at a certain agreed-upon price, any specific time frame
True
T/F: A method of paying bills that is popular with all small hospitality operators is the paid out method
True
T/F: A roast beef that has an AP price of 2000 and $.30 per pound And an edible you to 75% will have an EP cost of $3.07 per pound
True
T/F: Credit card payments are similar to the invoices on account system
True
T/F: The longer you delay paying your bills, the more you operate with someone else's money
True
T/F: The price extension for a particular invoice item is equal to the AP price per unit of that item times the number of units purchased
True
T/F: You may be able to save a great deal of money by purchasing use merchandise. However, these items are normally sold on an "as is, where is" condition
True
T/F: buyers who are price conscious me as suppliers to prepare itemized bills
True
T/F: cash discounts are not offered to large restaurant companies, they are used only for the benefit of smaller owner/operator businesses
True
T/F: if a buyer pays bill with a credit card, the suppliers much usually pay free to the credit card company that is typically go to a percentage of the amount of money charged
True
T/F: if you agree to except deliveries during the secret hours, the supplier may be willing to give you a price reduction
True
T/F: most suppliers will agree to the paid out bill paying procedure as long as the amount of money involved is not too large
True
T/F: promotional discounts are a type of rebate offer to a buyers company in exchange for promoting the retail sale of the product
True
T/F: when using the invoice is an account bill paying procedure, it is necessary to reconcile invoices and credits left with the statement receipt from the supplier at the end of the month
True
T/F: whenever there's a paid out there should be a receipt in the cash drawer or in the petty cash fund to account for it
True
T/F: you may be able to save a great deal of money by purchasing use merchandise. However, these items are normally sold on "as is, where is" condition
True
T/F:A formula that can be used to calculate a product serval cost per unit is: (AP price per unit divided by units edible yield percentage)
True
T/F:The optimal price should consider not only quality but supplier services as well
True
Given the following data, computer approximate EP cost per serving. Ingredient tomato catsup edible yield percentage 95% serving size 1 ounce (EP) a. $0.02 b. $0.04 c. $0.23 d. $0.37
a. $0.02
The serving size of a scotch drink is 50 mL. The AP price of the 1 L bottle of scotch is $9.10 and it's servable yield is 95%. What is the approximate of the cost of one serving of the scotch? a. $0.48 b. $0.96 c. $0.45 d. $0.72
a. $0.48
The standard cost of a chicken dinner is $3.47. The restaurant manager has determined that the standard cost of the chicken dinner should be 33% of its menu price. What is the suggested menu price of this dinner? a. $10.52 b. $7.05 c. $5.26 d. $4.62
a. $10.52
If the supplier charges 18% interest on unpaid balances, how much interest much you pay if you let a $2500 unpaid balance ride for one month? a. $37.50 b. $45.00 c. None of the above however an answer can be computer with only the data provided d. None of the above an answer cannot be computer with only the data provided
a. $37.50
When seeking a lower AP price for a product, the buyers emphasis should be on: a. Increasing the products overall value b. Obtaining the best possible supplier services c. The price only, not on the overall value d. Lowering the quality standard
a. Increasing the products overall value
Purchasing a product from our wholesale club would be an example of which way to reduce a price while value is increase? a. Providing your own supplier services b. Lowering the quality standard c. Co-op buying d. Promotional discounting
a. Providing your own supplier services
When buying from an intermediary, operators take title to the good when they: a. Receive and sign for them b. Resell them c. Order them d. Pay for them
a. Receive and sign for them
A major advantage of the one stop shopping concept is: a. The ordering cost may be reduced b. You'll get everything you need from only one supplier c. The buyer can handpick each item for quality d. The operation will qualify for cash discounts
a. The ordering cost may be reduced
Given the following situation, what should the buyer conclude? Portion cut sirloin but steaks can be purchased at an AP price of $5.28 per pound: the edible yield this 100%. Whole sirloin but can be purchased at an HP price of $4.16 per pound; the edible yield is 72% a. The portion cut steaks cost less to serve b. If you ignore other factors, such as labor and energy expenses needed to cut your own steaks, the serving cost is less if you cut the steaks yourself c. There is no difference in EP cost, so the decision must be made based on the other factors d. The buyer should automatically choose to purchase the whole sirloin butts because the AP price for the sirloin butt is lower than the portion cut.
a. The portion cut steaks cost less to serve
If A poultry product has an AP price of $1.10 per pound, and an edible you a percentage of 55%, the EP cost per pound is approximately: a. $0.61 b. $2.00 c. $3.00 d. $4.00
b. $2.00
Assume you normally purchase 250 cases of vodka a month and a price of $67.50 per case. You could purchase a two month supply add an AP price of $60 per case. If you're ordering cost is $50 per order and your storage cost is 24% per year, approximately how much money would you save if you purchased a two month supply? a. $1875 b. $3725 c. $5312 d. None of the above- the answer above cannot be computed with only the data providedNone of t
b. $3725
If the AP price equals $2.75 per pound, and the EP cost per 4 ounce serving is $0.92, The edible yield percentage is: a.50% b. 75% c. 100% d. The answer cannot be computed with only the data provided
b. 75%
The primary purpose of the hedging procedure is to: a. Reduce the EP cost of meat, dairy, and poultry products b. Maintain an acceptable and predictable AP price c. Earn a profit on the sale and purchase of futures contracts d. Obtain a generous discount from the supplier
b. Maintain an acceptable and predictable AP price
Purchasing damaged goods is sometimes referred to as: a. Contract buying b. Salvage buying c. Fixed bid buying d. PF buying
b. Salvage buying
The formula used to calculate food cost is: a.Beginning inventory + sales - ending inventory b.Beginning inventory + purchases - ending inventory - Credit for employee meals c. Beginning inventory + sales - ending inventory - Credit for employee meals d. Beginning inventory + Credit for employee meals - ending inventory
b.Beginning inventory + purchases - ending inventory - Credit for employee meals
The EP cost is equal to the AP price divided by the: a. PD b.Edible yield percentage c. Target food cost percentage d. EOQ
b.Edible yield percentage
A restaurant has purchased 32 Alaskan King crab's for $131.20. If it has desired food cost percentage of 25%, what is the suggested menu price for one crab? a. $4.10 b. $5.47 c. $16.40 d. $32.80
c. $16.40
A typical credit period Demanded by most large hospitality operations is: a. 10 days b. 25 days c. 45 days d. One year
c. 45 days
A major disadvantage to drop shipments is: a. The products can be shipped cheaper as part of a shipment already scheduled for that area b. The shipper and/or the common carrier must have insurance to cover the cost of the products being shipped c. If there is a problem with the products and the order is rejected by the reciever the driver usually cannot take the good back d. The driver is not responsible for and disagreements betweent the shipper and buyer
c. If there is a problem with the products and the order is rejected by the reciever the driver usually cannot take the good back
A blanket order is ideal to use: a. For higher perishable items b. For high end, expensive items c. Miscellaneous items that are not particularly expensive d. None of the above
c. Miscellaneous items that are not particularly expensive
Which one of the following pricing procedures do suppliers prefer? a. Prices as a function of competitive b. Price is determined by supply and demand c.Buyer pricing d.None of the above
c.Buyer pricing
Buying food salvage your food from unlicensed purveyors is: a. An excellent way to reduce food costs b. Not a good idea primarily because the products are obsolete c.Violation of local health codes d. Type of introductory offer
c.Violation of local health codes
Which of the following is an objective of the optimal payment policy? a. Keep your money as long as possible b. Pay your bills on their due dates c. Try to deal with suppliers who have favorable credit terms d. All of the above
d. All of the above
A bill pay or generally will not pay a bill before its due date primarily because: a. The cash discount will be forfeited b. It is too difficult to arrange payment at other than the regularly scheduled time c.Usually local suppliers didn't like it because it interferes with their normal bookkeeping cycles d. He or she will lose the opportunity to use the money and some other profitable way
d. He or she will lose the opportunity to use the money and some other profitable way
Which of the following statements about hedging is false? a. Hedging is used to maintain, not reduced, a specific AP price b.Hedging can be done for only a few items which account for the bulk of purchasing dollar in an organization c. Hedging is practiced more by larger operation than small independents d. Hedging is beneficial to organizations because it does not require much money to buy futures contracts
d. Hedging is beneficial to organizations because it does not require much money to buy futures contracts
The PD is equal to the PF: a. Divided by the edible yield percentage b.Divided by the AP price c. Multiplied by the EP cost d. Multiplied by the edible yield percentage
d. Multiplied by the edible yield percentage
A buyer may be able to earn a price discount from a supplier if your she is willing to a. Purchase in small quantities b. Buy premium brand merchandise c. Both of the above d. None of The above
d. None of The above
When buying under the direct buying arrangement, the hospitality operation takes title to the goods purchased when: a. The goods are received, inspected, and approved by the operation b. Hospitality operation places the order for the goods c. The hospitality operation pays the supplier for the goods d. The goods leave the primary sources premises
d. The goods leave the primary sources premises
For suppliers the most favorable AP price determination is based on: a. a function of the supplier's cost b. a function of the supply and demand c. a function of competitive pressure d. buyer pricing
d. buyer pricing