Which of the Following Statements Concerning Small-Lot Production Is Not

question 55

Multiple Choice

Which of the following statements concerning small-lot production is not true?

• A)small-lot production requires less space
• B)small-lot production requires more capital investment
• C)small-lot production simplifies transportation between workstations
• D)small-lot production allows processes to be moved closer together

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Definitions:

Manufacturing Overhead

Manufacturing overhead includes all the indirect costs associated with producing goods, other than direct materials and direct labor, such as utilities, depreciation, and maintenance expenses.

Direct Materials

Raw materials that are directly consumed in the manufacturing of a product and are easily identifiable in the finished product.

Period Cost

Expenses incurred that are not directly tied to production activities, such as selling, administration, and financial costs.

Direct Labor

The wages paid to workers directly involved in the production of goods or services.