Prior to Installing a JIT System, Clarendon Company Used Machine

question 17

Multiple Choice

Prior to installing a JIT system, Clarendon Company used machine hours to assign maintenance costs to its three products of 6-inch, 8-inch, and 11-inch insulation. The maintenance costs totaled $400,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: After installing JIT, three manufacturing cells were created and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $400,000; however, these costs are now traceable to each cell.
After installing JIT, the maintenance cost per roll of 11-inch insulation would be

• A) $12.50.
• B) $12.86.
• C) $15.00.
• D) $5.86.

Understand the components and significance of balance of trade and current accounts in international economics.

Identify and explain the mechanisms and forums for resolving international business disputes.

Recognize the purpose and impact of quotas and tariffs on international trade.

Comprehend the objectives and effects of historical and modern trade agreements, including GATT.

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Definitions:

Merchandise Inventory

Goods that a company holds with the intent to sell them as part of its primary operations.

Perpetual Inventory System

A method of inventory management where records are updated in real-time with every sale and restocking.

FOB Shipping Point

A term in shipping where the buyer assumes responsibility for the goods and shipping cost as soon as the goods leave the seller’s premises.

Freight Charges

Costs incurred for transporting goods from one place to another by sea, air, or land.