Assume That Facility Costs Are $350,000 Per Year for a Plant

question 27

Multiple Choice

Assume that facility costs are $350,000 per year for a plant occupying 20,000 square feet.The cost per square foot is $17.50.A value stream occupying 10,000 square feet would be assigned a cost of $175,000.If the value-stream manager figures out how to do the same tasks with 5,000 square feet, the cost would be reduced to:

• A) $87,500.
• B) $77,000.
• C) $175,000.
• D) $200,500.

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Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity.

Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition.

Statement

A formal document summarizing the financial position or performance of an entity, such as an income statement or balance sheet.

Operating Activity

Activities directly related to the primary business operations of a company, including production, distribution, and sales of goods and services.