A Company That Manufactures Complex Mechanical Assemblies to Customer Order

question 77

Multiple Choice

A company that manufactures complex mechanical assemblies to customer order and ships them directly to the customer is implementing manufacturing cells. The benefit most likely to result from this effort is a reduction in the:

• A) number of component shortages.
• B) production planning horizon.
• C) time to fill customer orders.
• D) response time to a request for quote.

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Definitions:

Variable Budget

A budget that adjusts in response to changes in activity levels or other factors, as opposed to a fixed budget.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate forecasting and analysis.

Static Budget

A fixed budget that remains unchanged over a period, regardless of variations in actual sales volume, production levels, or other operating factors.

Variable Budget

Variable Budget is a budget that adjusts based on changes in the volume of activity, allowing expenses to vary in direct proportion to changes in operational levels.