Which of the Following Statements Is Most Appropriate with Respect

question 96

Multiple Choice

Which of the following statements is most appropriate with respect to a 70% learning curve?

• A) There will be a 70% decrease in direct labour per unit each time the production volume doubles.
• B) Each successive unit of production will take 70% of the direct labour of the previous unit.
• C) There will be a 30% decrease in direct labour per unit each time production volume doubles.
• D) Thirty percent of the production will be defective until full learning takes place.
• E) Seventy percent of the workforce is fully educated.

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Definitions:

Budgeted Finished Goods

An estimate of the finished goods a company plans to produce over a certain period as part of its budgeting process.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.

Inventory

The raw materials, work-in-progress (WIP), and finished goods that a company holds for the purpose of sale in the ordinary course of business.