Which of the Following Costs Is NOT Relevant to a Special-Order

question 10

Multiple Choice

Which of the following costs is NOT relevant to a special-order decision?

• A)the direct labour costs to manufacture the special-order units
• B)the variable manufacturing overhead incurred to manufacture the special-order units
• C)the portion of the cost of leasing the factory that is allocated to the special order
• D)All of the above costs are relevant.

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Definitions:

Just-in-Time Inventory

Just-in-Time Inventory is an inventory management strategy that aims to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Total Quality Management

Total Quality Management (TQM) is an organization-wide approach focused on continuous improvement and meeting customer satisfaction through systematic problem-solving and team-based collaborative efforts.

Operations

Activities involved in the day-to-day functions of a business that are necessary for it to run efficiently and effectively.

EOQ

Economic Order Quantity, the ideal order quantity a company should purchase to minimize its inventory costs, including holding and ordering costs.