Consider a Pizza Parlor

question 22

Multiple Choice

Consider a pizza parlor. Which of the following would not be a valid productivity measure?

• A) pizzas produced / number of workers used
• B) pizzas produced / number of ovens
• C) pizzas produced / cost of workers and ingredients
• D) pizzas produced / cost of all inputs used
• E) labor hours / pizzas produced

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Definitions:

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or facility to allocate indirect costs to products.

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or delivery of services.

Departmental Overhead Rates

Overhead rates calculated for specific departments within a company, allowing for more accurate assignment of overhead costs to products.

Direct Labor Hours

The total hours worked by employees directly involved in the production process.