A Firm Manufactures Custom-Made Furniture Based on Customer Specifications

question 15

Multiple Choice

A firm manufactures custom-made furniture based on customer specifications. Which of the following facilities layout would best suit the firm's needs?

• A) Process layout
• B) Fixed-position layout
• C) Sequential layout
• D) Product layout
• E) Flexible manufacturing layout

Know how to record and handle transactions involving accounts receivable, including factoring, credit sales, and the use of promissory notes.

Comprehend the methods for calculating and recording interest on notes receivable.

Grasp the accounting treatments for different types of receivables transactions, such as sales with bank credit cards and pledging accounts receivable as loan collateral.

Recognize the role and mechanics of the allowance method in accounting for bad debts.

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Definitions:

Subsidy

Financial support extended by the government to a sector, industry, or individual, intended to promote economic and social policy objectives.

Negative Externality

A cost imposed without compensation on third parties by the production or consumption of sellers or buyers. Example: A manufacturer dumps toxic chemicals into a river, killing fish prized by sports fishers. Also known as an external cost or a spillover cost.

Spillover Cost

A cost incurred by someone who is not a direct participant in a transaction, often referring to negative externalities resulting from economic activities.

Allocative Efficiency

occurs when resources are distributed in a manner that results in the optimal combination of goods and services produced to match consumer preferences.