The Cost of Wasted Capacity Is

question 34

Multiple Choice

The cost of wasted capacity is

• A)the reduction in margin that results from having to go to a backup source.
• B)the margin that would have been generated if the capacity had been used for production.
• C)the productivity increase generated when the capacity is used for production.
• D)the sales potential of excess capacity kept in reserve for emergency production.

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Definitions:

Sale Itself

An actual transaction or agreement where a seller agrees to transfer ownership of goods or property to a buyer for a price.

Contingent on Approval

Depending on the granting of approval or permission by a relevant authority or party before proceeding or becoming effective.

Goods-In-Bailment Contract

A type of contract in which the purchased goods are in some kind of storage under the control of a third party, such as a warehouseman.

Negotiable Document of Title

A document that guarantees the delivery of goods and can be transferred by endorsement to another party, facilitating the trading of goods without physical movement.