A Team Has Been Assembled and Assigned a Project to Reduce

question 355

Multiple Choice

A team has been assembled and assigned a project to reduce recent, unanticipated production cost overruns. Which of the following tools should the project team select to determine the possible origins of the increased costs?

• A) Pareto chart
• B) Fishbone diagram
• C) Process diagram
• D) Run chart

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, contributing to covering fixed costs and profit.

Break Even

is the point at which total costs and total revenues are equal, meaning there is no net loss or gain, and it's a rephrased term for determining financial balance.

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and direct labor costs.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from revenues.