[amp_mcq option1=”higher setup cost” option2=”lower repair cost” option3=”higher setup cost” option4=”higher repair cost” correct=”option1″]<\/p>\n
The correct answer is: A. higher setup cost<\/strong><\/p>\n A lower level of production leads to a higher setup cost because the cost of setting up a production line is fixed, regardless of the number of units produced. When production levels are low, the cost of setup per unit produced is higher.<\/p>\n The cost of setup includes the cost of labor to set up the machines, the cost of materials to produce the first few units, and the cost of any downtime that occurs while the machines are being set up.<\/p>\n When production levels are high, the cost of setup per unit produced is lower because the cost of setup is spread over a larger number of units.<\/p>\n The following are the explanations of each option:<\/p>\n A lower level of production does not necessarily lead to a lower repair cost. The cost of repairs is determined by the number of defects that occur, not by the number of units produced. If the quality of the product is high, then the cost of repairs will be low regardless of the level of production.<\/p>\n This is the correct answer.<\/p>\n This is not the correct answer. The cost of repairs is determined by the number of defects that occur, not by the number of units produced. If the quality of the product is high, then the cost of repairs will be low regardless of the level of production.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”higher setup cost” option2=”lower repair cost” option3=”higher setup cost” option4=”higher repair cost” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-48590","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n\n
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