A Custom Machine Shop Is Able to Process 25 Orders

question 16

Multiple Choice

A custom machine shop is able to process 25 orders per day. The average processing time is 4 days. What is the average number of orders that are in process at any time?

• A) Less than 50
• B) More than 50 but less than or equal to 100
• C) More than 100 but less than or equal to 150
• D) More than 150 but less than or equal to 200

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Definitions:

Direct Materials

Raw materials directly used in the production of goods, easily traceable to the product being manufactured.

Operating Income

The profit realized from a business's core operations after deducting operating expenses such as wages and cost of goods sold, but before taxes and interest.

Direct Labor

The cost of wages for those workers directly involved in the production of goods or services, not including support staff.

Overhead

General business expenses that are not directly attributable to a specific business activity, product, or service but are necessary for the business to operate.