The Arrival of New Manufacturing Techniques Such as Automation, Flexible

question 148

Multiple Choice

The arrival of new manufacturing techniques such as automation, flexible manufacturing systems, and cluster or cell manufacturing has:

• A) Emphasized the importance of direct labor variances.
• B) Not affected the importance of direct labor cost variances.
• C) Led to a deemphasis of the importance of direct labor cost variances.
• D) Made direct labor variances obsolete.
• E) Eliminated the need to calculate and report direct materials variances.

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Definitions:

Marginal Analysis

The examination of the benefits and costs of an additional unit of consumption or production to make decisions on allocations of resources.

Risk Aversion

The behavior of preferring to avoid loss rather than making a gain, reflecting a preference for certainty over uncertainty.

Irrational Decision

A choice made that contradicts logical reasoning, often influenced by emotional factors or cognitive biases.

Status Quo Bias

The tendency to avoid making a decision.