Which of the Following Is an Example of a Nonfinancial

question 113

Multiple Choice

Which of the following is an example of a nonfinancial measure of performance used in lean manufacturing?

• A)lead time
• B)setup time
• C)number of units scrapped
• D)all of these choices

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Definitions:

Allocation Base

An allocation base is a measure or quantity (like direct labor hours or machine hours) that is used to assign costs in an equitable manner.

Overhead Costs

Expenses associated with running a business that cannot be directly attributed to a specific product or service, such as rent, utilities, and administrative expenses.

Plantwide Overhead Rate

A single overhead rate applied to all production activities, calculated by dividing the total factory overhead by an allocation base, such as direct labor hours.

Direct Labor Hours

The total hours of labor directly involved in the manufacturing or production process of goods and services.