COMMERCE 2AB3 Study Guide - Final Guide: Indian Railways, Weighted Arithmetic Mean, Opportunity Cost

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Karim Karim

Document Summary

True/false: reducing defects helps to reduce costs, but does not make the business more competitive. Reducing defects does make the business more competitive: reworked goods are unacceptable units of production usually not capable of being. Difficulty: 2 repaired or converted into a salable product. Reworked goods are unacceptable units of production that can be repaired into a salable product. The value of scrap material can have either a high or low sales value relative to the product with which it is associated. Scrap material by definition has a low sales value: normal spoilage adds to the cost of the job to which it is attributed in a job order. Answer: true: when calculating normal spoilage rates, the base should be actual units started in. Abnormal spoilage should not arise under efficient operating conditions. Difficulty: 2 in a higher cost per unit. Counting spoiled units usually results in a lower cost per unit.