General Motors Recently Built a Plant in Toluca,Mexico,leading to a 40

question 45

Multiple Choice

General Motors recently built a plant in Toluca,Mexico,leading to a 40 percent savings on production costs when transportation and labor costs were considered together.This is an instance of ______.

• A) nearshoring
• B) contract logistics
• C) supply chain orientation
• D) exclusive distribution

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Definitions:

Overhead Rate

The ratio used to allocate indirect costs to produced goods, calculated by dividing total overheads by an allocation base.

Plantwide Predetermined

A single overhead rate calculated for an entire plant or facility, used to allocate overhead costs to all products equally.

Direct Labor-Hour

A measure of the amount of time spent by workers directly involved in the manufacturing process to produce a single unit.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate estimated overhead costs to products or job orders based on a chosen activity base.