Which of These Factors Need to Be Considered When Computing

question 75

Multiple Choice

Which of these factors need to be considered when computing the actual capacity of a machine or system?

• A)Scrap
• B)Inefficiencies
• C)Rework
• D)All of the above
• E)A and C above

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Definitions:

Raw Materials Inventory

A rephrased definition: Stock of basic materials awaiting use in the production process to create finished goods.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are considered a variable cost.

Indirect Materials

Materials used in the production process that cannot be directly linked to a specific product, such as lubricants and cleaning supplies used in machinery.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as utilities, depreciation, and maintenance of factory equipment.