Given the Following Data About an Assembly Line and the Knowledge

question 62

Multiple Choice

Given the following data about an assembly line and the knowledge that we are trying to attain an output rate of 40 units per hour,what is the theoretical minimum number of stations?

• A)four or fewer stations
• B)five stations
• C)six stations
• D)seven or more stations

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Definitions:

Relevant Cost

Costs that are directly tied to a specific managerial decision and will change as a result of that decision, critical for effective cost management and decision-making processes.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not factor into future decision making.

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed.

Make or Buy

A decision-making process in which a company chooses between manufacturing a product internally or purchasing it from an external supplier.