Improvements in Inventory Control Represent a Positive Technological Change Because

question 279

Multiple Choice

Improvements in inventory control represent a positive technological change because they allow firms to produce the same output with fewer inputs. In recent years, many firms have adopted an inventory system in which firms accept shipments from suppliers as close as possible to the time they will be needed. Wal-Mart has been a pioneer in using inventory control systems to this in its stores. This type of inventory system is called a ________ inventory system.

• A) first-in-first-out
• B) cash-and-carry
• C) just-in-time
• D) buy-now-pay-later

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a selected activity base.

Direct Labor-hour

The number of labor hours spent on the direct production of goods or services.

Manufacturing Overhead

Costs incurred from the manufacturing process, which exclude both direct labor and materials, are categorized as indirect costs.

Estimated Total

An approximation of the total value, cost, or quantity of a particular item or project.