Data for a Factory -
Total Cost of Ownership Is a Management Accounting Technique

question 21

Multiple Choice

Data for a factory
$\begin{array}{ll}\text { Total factory cost } & £ 10,000 \\\text { Total time au ailable on key resource (hours) } & 2,500 \\\text { Contribution per unit product A } & £ 34.00 \\\text { Contribution per unit product B } & £ 30.00 \\\text { Contribution per unit product C } & £ 22.00 \\\text { Contribution per unit product D } & £ 20.00 \\\text { Hours required product A } & 12.0 \\\text { Hours required product B } & 6.0 \\\text { Hours required product C } & 6.0 \\\text { Hours required product D } & 8.0\end{array}$

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Total cost of ownership is a management accounting technique with the following important supply chain implications:

• A)Recognition that the cost of acquiring goods and services includes more than just quoted piece price.
• B)Locked in cost issues may affect suppliers.
• C)Sharing of cost and output data enables benefits of partnership sourcing.
• D)Synchronisation of production plans.

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Definitions:

Worker's Performance

The assessment of how effectively an individual's work activities and output achieve the expectations or objectives set by the employer.

Stopwatch Study

A technique used in time and motion studies to measure the time it takes to perform a specific task.

Normal Time

The amount of time that should be required to complete a task under normal working conditions.

Performance Rating

A systematic evaluation of an individual's job performance or a product's effectiveness, often based on predefined criteria.