The Assumptions Necessary for a Successful Product-Oriented Layout Include All

question 53

Multiple Choice

The assumptions necessary for a successful product-oriented layout include all EXCEPT which of the following?

• A) adequate volume for high equipment utilization
• B) standardized product
• C) volatile product demand
• D) adequately standardized supplies of raw materials and components
• E) All of these are appropriate assumptions.

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Definitions:

Direct Method

A cost allocation approach that assigns service department costs directly to producing departments without intermediate allocations, intended to improve cost accuracy.

Support Departments

Units within an organization that provide services or support to the primary revenue-generating departments.

Cost Allocation

The process of identifying, aggregating, and assigning costs to cost objects, such as products, services, or departments.

Cost Pool

A grouping of individual costs, typically by department or service, from which cost allocations are made to products or services.