A Factory Is Operating at Less Than 100% Capacity

question 155

Multiple Choice

A factory is operating at less than 100% capacity. Potential additional business will not use up the remainder of the plant capacity. Given the following list of costs, which one should be ignored in a decision to produce additional units of product?

• A) Variable selling expenses
• B) Fixed factory overhead
• C) Direct labor
• D) Contribution margin of additional units

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Definitions:

Sales Goals

Objectives set by a company's sales department to reach a certain performance level within a specific timeframe.

Unconventional Rewards

Rewards that do not follow traditional forms of compensation or incentives, often aimed at promoting creativity, loyalty, and personal satisfaction.

Salespeople

Individuals who are responsible for selling products or services to customers, acting as a direct link between the company and its market.

Marketing Dashboard

A visual representation tool that displays key marketing metrics and KPIs, enabling easier tracking of performance and decision-making.