Which of the Following Is a Short-Term Capacity Decision

question 66

Multiple Choice

Which of the following is a short-term capacity decision?

• A)Expanding the size and number of beds in a hospital
• B)Amount of warehouse space to rent for a new promotional item
• C)Closing down a distribution center
• D)Changing the cooking technology in a chain of fast-food restaurants

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Definitions:

Cost Of Goods Sold

The cost of merchandise sold recognized as an expense; the cost of finished goods available for sale minus the ending finished goods inventory.

Inventory

Inventory consists of the goods and materials a business holds for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.

Conversion Costs

The sum of direct labor costs and manufacturing overhead costs, representing the costs to convert raw materials into finished goods.

Planned Production

The forecasted or scheduled production activities based on demand, inventory levels, and capacity planning to meet business objectives.