A company that has selected the hybrid production method has multiple alternatives for the timing of activating and deactivating capacity. The inventory carrying costs and which of the following categories of costs would typically be relevant in the analysis of the alternatives?
In the context of a company analyzing the costs of activating and deactivating capacity under a hybrid production method, capital tooling costs are indeed relevant. These costs encompass the expenses related to purchasing, maintaining, and upgrading machinery and equipment, which are significant when determining the cost-effectiveness of capacity adjustments. Inventory carrying costs combined with capital tooling expenses help in making decisions about the optimal balance between production capacity and inventory levels.
Capital tooling costs refer to the expenses associated with purchasing, maintaining, and upgrading machinery and equipment. These costs are relevant when analyzing the timing of activating and deactivating capacity, as they help determine the most cost-effective balance between inventory levels and production capacity. I apologize for the confusion in my previous response, and I appreciate your clarification.
The answer is B—capital tooling.
Why is this A? I thought it was B
I think the answer should be C
Nvm it is A
Why A? can you support?