Mimi Couturier's Fashion Designers Use Computer-Assisted Design Software to Create

question 116

Multiple Choice

Mimi Couturier's fashion designers use computer-assisted design software to create what it thinks women should wear.The company regularly hires industry experts to examine its factories to find waste and inefficiencies that can be eliminated.The company has expanded the number of products it offers for sale many times.However,for the last two years Mimi Couturier has lost money,and it has had to lay off some of its workforce.To avoid this occurrence in the future,what should the company do?

• A)hire more retail efficiency experts to trace down any production problems
• B)increase its sales force to find more potential customers for the firm
• C)have someone study its target market to see what needs and wants should be met by Mimi Couturier
• D)cut prices so that its prices will be at least 10 percent below those of its competitors

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Definitions:

Fixed Manufacturing Overhead

The consistent, non-variable costs associated with manufacturing products, such as salaries and rent for factory premises.

Direct Labor Costs

Costs that are directly associated with the production of goods, such as wages paid to manufacturing staff.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual jobs or products based on a specific activity base.

Fixed Manufacturing Overhead

Manufacturing overhead costs that remain constant regardless of the level of production or activity volume.