C.P.M. Module 1: Purchasing Process (630-005) Free Practice Test

Question 1

Suppose Pass4test.com has a 5% profit margin, one dollar of savings in purchases will equal what amount of additional sales for Pass4test.com?

A. $ 5

B. $ 15

C. $ 20

D. $ 25

E. $ 10

Correct Answer: C

Question 2

You work as a purchaser at Pass4test.com. You received two bids for the supply of materials. A third supplier calls before the due date and requests an extension of time. What should you do?

A. Grant the extension if the supplier can prove that it is a small and disadvantaged supplier.

B. Grant the extension, because the purchaser should have at least 3 bids in order to have true competition.

C. Grant the extension if the reasons are justifiable, and inform all other suppliers of the extension.

D. Refuse to grant the extension for any reason.

Correct Answer: C

Question 3

Which of the following would NOT results in variances in a purchasing materials budget?

A. A change in sales forecasts.

B. Updates in the bill of materials.

C. A reduction inpurchasing's operating budget.

D. Master production schedule adjustments.

Correct Answer: C

Question 4

Which of the following is NOT a measure of the responsiveness of a supplier in state and local government purchasing?

A. Filling out the bid document correctly.

B. Providing required documentation.

C. Complying with the buying agency's specifications.

D. Meeting small, disadvantaged business requirements.

Correct Answer: D

Question 5

When can a purchasing department disclose supplier proprietary information to others within the buying organization?

A. When supplier samples have been provided.

B. Never.

C. When establishing alliances with other suppliers.

D. On a need-to-know basis only.

Correct Answer: D

Question 6

Which of the following would NOT be found in a materials budget for a special product?

A. Direct material costs.

B. Indirect costs.

C. Cost variances.

D. Usage variances.

Correct Answer: B

Question 7

Which of the following statements is TRUE?

A. None of the above

B. Direct costs change as a basis for the allocation of overhead.

C. Direct costs decrease per unit as output rises.

D. Direct costs increase as a function of product/service output.

Correct Answer: D

Question 8

Which two of the following statements regarding the concept of order consignment are TRUE?
(Choose two.)

A. The buyer pays only for goods removed from consignment, regardless of the length of time goods remain available for use.

B. The supplier normally determines minimum and maximum stocking levels.

C. Supplier invoices may be eliminated by using disbursement reports on items taken from consignment inventory.

D. The supplier is responsible for identifying shipped goods as consignment goods and must keep them separate fromnonconsignment goods in the buyer's inventory.

Correct Answer: A,C

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ISM C.P.M. Module 1: Purchasing Process (630-005) Free Practice Test