A System Has One Service Facility That Can Service 10

question 29

True/False

A system has one service facility that can service 10 customers per hour. The customers arrive at a variable rate, which averages six per hour. Since there is excess capacity, no waiting lines will form.

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Definitions:

Absorption Costing

An accounting method that includes all direct costs and allocated overhead costs in the cost base of manufactured goods.

Variable Costing

A costing method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in the cost of goods sold, with fixed manufacturing overhead treated as period costs.

Direct Labor

The wages and related expenses for workers who are directly involved in the manufacturing of products.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced or acquired items are the first to be expensed.