Which One of the Following Statements Is a Disadvantage of a Product

question 119

Multiple Choice

Which one of the following statements is a disadvantage of a product layout?

• A) Processing rates tend to be slower.
• B) It is more vulnerable to changes in the products and services offered.
• C) More space and capital are tied up in inventory.
• D) Materials handling tends to be costlier.

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends but reinvested in the business or kept as reserve.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Permanent Accounts

Balance sheet accounts that carry their ending balances over into the next accounting period, such as assets, liabilities, and equity accounts.

Accumulated Depreciation-Equipment

The total depreciation that has been recorded against a company's equipment since it was put into service.