Activity Analysis Allows Managers to

question 44

Multiple Choice

Activity analysis allows managers to

• A)classify activities so that processes can be eliminated.
• B)devise ways to minimize or eliminate non-value-added activities.
• C)evaluate process performance to gain competitive advantages.
• D)all of the above.

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Definitions:

Period Cost

Expenses that are not directly tied to the production process and are charged to the period in which they occur, such as selling and administrative expenses.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and are significant in cost.

Workman's Compensation

Insurance that provides wage replacement and medical benefits to employees injured in the course of employment.

Factory Utilities

Costs associated with utilities in a manufacturing plant, such as electricity and water, considered part of manufacturing overhead.