A Vehicle Manufacturer Makes Base Models Using a Large-Scale Production

question 65

Multiple Choice

A vehicle manufacturer makes base models using a large-scale production process.It also partners with small companies that help customize its vehicles,thus offering a wide range of packages involving a variety of chassis colors,upholstery designs,music systems,GPS devices,and passenger safety options.The company's approach to its service offering is an example of ______.

• A) mass customization
• B) mass standardization
• C) customization
• D) standardization

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Definitions:

Direct Labor

The labor costs directly tied to the production of goods or the performance of services.

Overhead Cost

Overhead cost refers to ongoing business expenses not directly linked to creating a product or service, such as rent, utilities, and administrative costs.

Actual Overhead

The total real costs incurred for indirect materials, labor, and other expenses to operate a business, not directly tied to specific products or services.

Overhead Applied

Overhead applied is the portion of manufacturing overhead costs assigned to individual units of production based on a predetermined overhead rate.