With multiple products in a value stream, unit cost will increase if
A)more units are shipped than produced.
B)more units are produced than shipped.
C)average conversion cost is used instead of total average cost.
D)none of the above.

Question

Quizplus · Accepted Answer

If more units are produced than shipped, it means that there is excess inventory which results in storage costs, extra handling costs, and eventually obsolescence costs. This will increase the unit cost of the products in the value stream.

With Multiple Products in a Value Stream, Unit Cost Will