The Increased Use of Automation and Less Use of the Work

question 144

Multiple Choice

The increased use of automation and less use of the work force in companies has caused a trend towards an increase in

• A) both variable and fixed costs.
• B) fixed costs and a decrease in variable costs.
• C) variable costs and a decrease in fixed costs.
• D) variable costs and no change in fixed costs.

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Definitions:

Production Departments

Divisions within a manufacturing company responsible for different stages of the production process.

Direct Materials

Raw materials that can be directly traced to the production of a specific good or service in manufacturing or production.

Factory Overhead

Factory overhead refers to the indirect manufacturing costs not directly tied to the production of goods, such as utilities or management salaries.

Machine Hours

The total operating time of a machine, used as a basis for allocating manufacturing overhead.