At the Beginning of the Current Year,Smith Company Installed a JIT

question 15

Multiple Choice

At the beginning of the current year,Smith Company installed a JIT purchasing and manufacturing system.The following information has been gathered about one of the company's products. $\begin{array}{lr}\text { Theoretical annual capacity } & 4,000 \\\text { Actual production } & 3,600 \\\text { Production hours available } & 2,000 \\\text { Actual cost per unit } & \$ 28\end{array}$

-What is the ideal conversion cost per unit?

• A)$14 per unit
• B)$15.55 per unit
• C)$50.90 per unit
• D)$56 per unit

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Definitions:

FDIC

The Federal Deposit Insurance Corporation, a US government agency that insures deposits in banks and thrift institutions.

Bank Deposits

Money placed into banking institutions for safekeeping. These deposits are typically made into checking or savings accounts.

Bank Failures

Occurrences when banks are unable to meet their obligations to depositors and others, often leading to insolvency and closure.

Store of Value

A function of money allowing individuals to preserve purchasing power for future use.