The Last Step in Determining the Material Loading Charge Percentage

question 83

Multiple Choice

The last step in determining the material loading charge percentage is to

• A) estimate annual costs for purchasing, receiving, and storing materials.
• B) estimate the total cost of parts and materials.
• C) divide material charges by the total estimated costs of parts and materials.
• D) add a desired profit margin on the materials themselves.

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Definitions:

Average Cost Method

An inventory valuation method that calculates the cost of goods sold and ending inventory value based on the average cost of all similar items in inventory.

Direct Materials

Raw materials that can be directly traced to the production of goods in the manufacturing process.

Lean Manufacturing

A methodical procedure designed to cut down on waste in a factory setup without reducing work efficiency.

Manufacturing Cells

Groups of machines and/or workstations arranged closely together to manufacture similar products or components, enhancing production efficiency and flexibility.