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:

Raw Material Purchases

The total cost of materials bought that are intended to be used in the production of goods.

Cost of Goods Sold

The immediate expenses linked to the manufacturing of products that a company sells.

Sales Forecast

An estimate of the quantity of goods or services that an organization expects to sell in a particular period.

Raw Material Purchases Cost

The total amount spent on buying raw materials necessary for production.