Roundabout Methods of Production Are Said to Be Productive

question 37

Multiple Choice

Roundabout methods of production are said to be productive. What does this mean?

• A)Goods are best produced by many people working together-as in a circle.
• B)If you go round and round thinking about something, you will usually come up with the right way to do it-so you minimize on mistakes.
• C)If you take the most direct route to producing a good, you will save time, and time is something that producers want to save since "time is money."
• D)If you take time out to produce a capital good, with that capital good you can produce more than you could produce without it.

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Definitions:

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, such as utilities and salaries for maintenance workers.

Predetermined Overhead Rates

A calculated rate used to apply manufacturing overhead costs to products based on expected costs and activity levels.

Machine-Hours

A measure of production output, quantified by the number of hours machines are operated in the manufacturing process.

Molding

The process of manufacturing by shaping liquid or pliable raw material using a rigid frame called a mold or matrix.