Reference no: EM132789403
Question -
Q1. A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. A consultant has suggested some alternatives to increase output capacities as follows:
Alternative A - increase Department B's output to 200 units per day.
Alternative B - increase Department C's output to 120 units per day.
Alternative C - increase both department A and department C outputs to 110 units per day
Alternative D - increase departments D's output to 300 units per day
Assuming the costs of each alternative are similar and that only one can be chosen, which alternative would yield the best results for the business?
Q2. Which of the following is NOT a benefit of a just-in-time (JIT) system?
a. Areas previously used to store inventories are made available for other more productive uses.
b. Funds that have been tied up in inventories can be used elsewhere.
c. The time required to fill an order is reduced, resulting in quicker response to customers and consequentially greater potential sales.
d. Production workers are always busy.
Q3. Which of the following best describes the behaviour of variable cost per unit?
a. Variable cost per unit varies in decreasing proportion with the changes in the activity level.
b. Variable cost per unit remains constant with changes in the activity level.
c. Variable cost per unit varies in direct proportion with the activity level.
d. Variable cost per unit varies in increasing proportion with changes in the activity level.
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