The Ability to Rapidly and Inexpensively Switch Production from One

question 53

Multiple Choice

The ability to rapidly and inexpensively switch production from one product to another enables what are sometimes referred to as:

• A) economies of scale.
• B) economies of size.
• C) economies of shape.
• D) economies of scope.
• E) economies of shipping.

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Definitions:

High-cost Items

Products or services that have a significant purchase price or maintenance cost.

Periodic Inventory System

An inventory system where inventory levels and the cost of goods sold are updated in the accounting records periodically, often at the end of an accounting period.

Gross Profit Method

An accounting technique used to estimate the amount of inventory a company has by using the gross margin percentage.

Control of Inventory

The process of overseeing and managing the ordering, storage, and use of components that a company will use in the production of the items it will sell as well as the management of quantities of finished products for sale.