Which of the Following Statements About the Theory of Constraints

question 100

Multiple Choice

Which of the following statements about the theory of constraints is (are) true?
(A) The theory of constraints focuses on determining the optimal product mix when two or more resources restrict the attainment of a goal or objective.
(B) The theory of constraints focuses on maximizing the rate of throughput contribution while maximizing investment and other operating costs.

• A) Only A
• B) Only B
• C) Neither of these is true.
• D) Both of these are true.

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Definitions:

Intercompany Sales

Transactions involving the exchange of goods or services between subsidiaries within the same parent company.

Mark-Up

The amount added to the cost price of goods to cover overhead and profit, resulting in the selling price.

Effective Tax Rate

The true percentage of earnings that a person or business pays to the government, determined by dividing their total tax contribution by their taxable income.

Consolidated Statements

Consolidated Statements are financial reports that aggregate the financial position and operating results of a parent company and its subsidiaries, presenting them as a single entity.