Adrian Is Worried About His Factory's Consecutive Decrease in Profits

question 123

Multiple Choice

Adrian is worried about his factory's consecutive decrease in profits due to the goods that are damaged in the storehouse. This has increased his cost of factors of production. In an attempt to tackle the problem, he has set up a system of measuring the needs of his clients and manufacturing the required number of products. Which of the following approaches has Adrian adopted?

• A) Mathematical forecasting
• B) Queuing theory
• C) Linear programming
• D) Inventory analysis
• E) Network models

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Definitions:

Direct Materials

The raw materials that are directly traceable to the production of goods or services.

Direct Labor

Direct labor involves the wages of employees who are directly involved in the manufacturing or production process of a company's products or services.

Process Cost Summary

A report that aggregates the total costs associated with a particular production process, including materials, labor, and overhead.

Equivalent Units

An idea in cost accounting that involves allocating expenses to goods that are partially finished, measured as if the goods were fully completed.