A High Level of Product Availability Requires Less Inventory,which Will

question 53

True/False

A high level of product availability requires less inventory,which will keep costs down for the supply chain.

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Definitions:

Fixed Overhead Rate

A predetermined rate used to assign fixed overhead costs to cost objects, based on a specific activity level or base.

Normal Capacity Hours

The amount of production capability a company can expect to achieve under normal circumstances over a specific period.

Quantity Labor Variances

The variation between the actual number of labor hours utilized and the expected hours, usually impacting the cost of production.

Price Labor Variances

Refers to the difference between the actual labor cost incurred and the standard labor cost for the actual production achieved.