In Recent Years, Some Automakers Have Increased Manufacturing Operations in the Southeastern

question 113

Essay

In recent years, some automakers have increased manufacturing operations in the southeastern United States. Suggest two reasons why they have taken this step.

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Definitions:

Work in Process

Inventory that includes goods that are in the production process but not yet complete.

Cost of Goods Sold

Cost of Goods Sold entails the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, depreciation on equipment, and factory rent.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to products based on a selected activity base such as machine hours or labor hours.