Which Statement Is True Concerning Just-In-Time Inventory Systems

question 73

Multiple Choice

Which statement is true concerning just-in-time inventory systems?

• A)Just-in-time systems deal only with defective and reworked units.
• B)Just-in-time systems require the use of many suppliers.
• C)Just-in-time systems keep inventory to a minimum by careful planning.
• D)Just-in-time systems work better for small companies than for large companies.

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Definitions:

Activity-Based Costing

A pricing strategy that allocates overhead and indirect expenses to specific products and services according to the activities they necessitate.

Manufacturing Overhead

The indirect costs associated with manufacturing a product, including expenses like utilities, maintenance, and factory equipment.

Activity-Based Costing

A method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Fabrication Activity Cost Pool

A grouping of all the costs associated with the fabrication activities in a manufacturing process, used in activity-based costing.