Long-Term Expenditures Are Usually More Carefully Planned Than Short-Term Outlays

question 165

Multiple Choice

Long-term expenditures are usually more carefully planned than short-term outlays because

• A) they represent a binding commitment of company funds that continues long into the future.
• B) they are usually sold at high-profit margins.
• C) they can be used to pay off accounts payable.
• D) the expenditures must finance items that are easily liquidated.
• E) all of these.

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Definitions:

Lean Manufacturing

A planned procedure for cutting down on waste in manufacturing operations without negatively affecting productivity.

Conversion Costs

The combined costs of direct labor and overhead expenses incurred to convert materials into finished goods.

Work in Process

Inventory that includes all materials, labor, and overhead costs for products in the production process but not yet completed.

Lean Manufacturing

A methodology that focuses on minimizing waste within manufacturing systems while simultaneously maximizing productivity.