Which of the Following Is NOT a Reason Why Manufacturers

question 91

Multiple Choice

Which of the following is NOT a reason why manufacturers must align capacity with projected demand on a global basis?

• A)globalization of supply chains
• B)scarcity of supply
• C)uncertain demand
• D)ISO certification requirements

Understand the lower of cost and net realizable value (LCNRV) rule and its application.

Differentiate between goods on consignment and goods in transit and their impact on inventory.

Grasp the concept of the gross profit method for estimating ending inventory.

Comprehend the retail inventory method and its application.

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Definitions:

Materials Quantity Variance

The difference between the actual amount of materials used in production and the expected amount, which can indicate efficiency or procurement issues.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period, used as a benchmark to control costs.

Variable Manufacturing Overhead

Costs that fluctuate with the volume of manufacturing activity, including supplies, utilities, and indirect labor.

Labor Efficiency Variance

The difference between the actual number of labor hours worked and the standard hours expected to complete the work, multiplied by the standard labor rate.