Tata Motors Assembles Cars from Their Own Parts and Subassemblies

question 35

Multiple Choice

Tata Motors assembles cars from their own parts and subassemblies and also controls the mining and fabrication of the materials used to create those parts. When Anand ordered his luxury sedan with the platinum dashboard he knew he wouldn't be taking delivery of his dream car the next week. Rather, he would be waiting a while thanks to:

• A)a mismatch between supply chain lead time and customer demand.
• B)a mismatch between overall demand levels and productive capacity.
• C)a mismatch between demand and the most efficient production volume.
• D)a mismatch between demand and the most efficient shipment volume.

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Definitions:

Manufacturing Overhead

Indirect costs related to manufacturing, including utilities, rent for manufacturing facilities, and equipment maintenance, not directly tied to individual units produced.

Overapplication of Overhead

A situation where the allocated overhead costs exceed the actual overhead costs incurred.

Machine Hours

Machine hours denote the total amount of time a machine is operated within a specific period, used for costing and operational efficiency measures.

Overhead Applied

Overhead applied is an accounting term referring to the allocation of indirect costs to the production of goods or services, based on a predetermined rate.