Which of the Following Is Not an Effective Way of Dealing

question 88

Multiple Choice

Which of the following is not an effective way of dealing with a production constraint (i.e. ,bottleneck) ?

• A) Reduce the number of defective units produced at the bottleneck.
• B) Pay overtime to workers assigned to the bottleneck in the production process.
• C) Pay overtime to workers assigned to work stations located after the bottleneck in the production process.
• D) Subcontract work that would otherwise require use of the bottleneck.

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Definitions:

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet until the goods or services are provided.

Receipt of Cash

This refers to the actual inflow of cash into a business, resulting from transactions such as cash sales, receiving payment from debtors, or any other cash receipts.

Warranty Accrual Method

An accounting approach that recognizes the estimated cost of fulfilling product warranties as an expense when the related sales occur.

Warranty Costs

Expenses incurred by a company to repair, replace, or refund products that are found to be defective within the warranty period.