Use the Process Flow Diagram to Determine Which of These

question 136

Multiple Choice

Use the process flow diagram to determine which of these events has the greatest net benefit.

• A)reducing the flow time at Station A from 8 to 7 minutes
• B)increasing the capacity at Station B to 8 units per hour
• C)increasing the capacity at Station C to 7 units per hour
• D)reducing the flow time at Station D from 9 to 8 minutes

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Definitions:

Variable Overhead Efficiency Variance

The difference between actual hours worked to produce an item and the standard hours expected, multiplied by the variable overhead rate.

FOH Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is attributed to the difference in actual and budgeted activity levels.

FOH Budget Variance

The difference between the actual and budgeted factory overhead costs over a certain period, indicating under or overspending.

Work in Process

Inventory that includes materials that have begun the production process but are not yet completed products.