The Theory of Constraints (TOC) Strives to Reduce the Effect

question 204

Multiple Choice

The Theory of Constraints (TOC) strives to reduce the effect of constraints by:

• A) offloading work from constrained workstations.
• B) increasing constrained workstation capability.
• C) changing workstation order to reduce throughput time.
• D) A and B
• E) A, B, and C

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Definitions:

Static Budget

A budget that does not change or adapt to variations in business activity levels throughout the budgeting period.

Sales Variance Analysis

A financial process used to compare the actual sales against forecasted sales to understand variances and their causes.

Planning

The process of setting objectives, determining strategies to achieve them, and coordinating resources to execute the strategies.

Price Variance

The difference between the actual cost of a good or service and its budgeted or standard cost.