Operation X Feeds into Operation Y

question 3

Multiple Choice

Operation X feeds into Operation Y.Operation X has an effective capacity of 55 units per hour.Operation Y has an effective capacity of 50 units per hour.Increasing X's effective capacity to ensure that Y's utilization is maximized would be an example of ________ a constraint.

• A)overcoming
• B)outsourcing
• C)insourcing
• D)cushioning
• E)none of the above

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Definitions:

Activity Rate

The cost driver rate used in activity-based costing to allocate costs to products or services based on specific activities.

Supervising Costs

Expenses related to the management and oversight of workers and production processes, including salaries of supervisors and managerial staff.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate insights into the actual costs of production or services.

Machine-Hours

A measure of production time in hours by machines, used as a basis for allocating manufacturing overhead in cost accounting.