Emphasis on Departmental Efficiency

question 106

Multiple Choice

Emphasis on departmental efficiency

• A) causes bottleneck departments to over-produce and build work-in-process inventories.
• B) causes stock outs related to demand-pull systems.
• C) is a critical component of a lean accounting system.
• D) none of these.

---

Definitions:

Vertical Analysis

An accounting method where each entry in a financial statement is listed as a percentage of another item, typically used for comparing companies of different sizes or assessing trends within a single company over time.

Cost of Goods Sold

The direct expenses related to the manufacturing of products that a company sells.

Current Ratio

A liquidity measure that evaluates a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.

Liquidity Ratio

A financial metric used to determine a company's ability to pay off its short-term liabilities with its existing assets.