Figure 21-5
at the Beginning of This Year, Sammie Company

question 28

Multiple Choice

Figure 21-5
At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products: $\begin{array}{lr}&\text { Current Year }\\\text { Theoretical annual capacity } & 2,000 \\\text { Actual production } & 1,800 \\\text { Production hours available } & 1,000 \\\text { Scrap (kgs) } & 200 \\\text { Materials used (kgs) } & 6,400 \\\text { Actual cost per unit } & 14 \\\text { Days of inventory } & 3 \\\text { Number of defective units } & 30\end{array}$
-Refer to Figure 21-5. Sammie's defective units as a percentage of total units produced would be

• A)3.16%.
• B)3.00%.
• C)1.67%.
• D)1.50%.

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Definitions:

Continuous Inflation

Continuous inflation refers to a sustained increase in the general price level of goods and services in an economy over a period of time, eroding purchasing power.

Natural Rate of Unemployment

The level of unemployment that is expected in an economy without temporary fluctuations, often seen as the equilibrium state of the labor market.

Inverse Relationship

A situation where two variables move in opposite directions, meaning when one variable increases, the other decreases.

Active Macroeconomic Policy

Economic strategies implemented by the government or central bank to stabilize the economy by adjusting spending, taxes, and interest rates.