Material Requirements Planning (MRP)systems

question 25

Multiple Choice

Material requirements planning (MRP) systems:

• A) are an important element in JIT programs.
• B) can be used to forecast sales.
• C) can be used to develop production schedules.
• D) minimize costs by scheduling delivery dates that minimize the amount of inventory needed.
• E) all of the above

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Definitions:

Conversion Costs

Costs associated with converting raw materials into finished goods, including labor and manufacturing overhead.

Direct Materials

The raw materials directly used in the manufacturing of a product, clearly identifiable and assignable to that product.

Indirect Labor

Labor costs associated with supporting the production process but not directly working on the product, such as maintenance or supervision.

Process Cost Report

A financial report in managerial accounting that summarizes the costs associated with processes or production departments, tracking material, labor, and overhead.