Module 2 — Factory Finance

Module quiz

5 questions on Module 2 — Factory Finance. Answer them all, then check your score before moving on. 4 correct or more is a pass. Your best score is saved on this device, and to your account when you are signed in. This is a self-check, not an accredited assessment.

1. 1. Why do factories compare styles using cost per standard minute (CSM)?

   Because minutes are easier to count than moneyBecause styles differ in work content — CSM makes cost comparable across styles, lines and months, and is the basis of the make-up priceBuyers demand itIt avoids calculating efficiency

2. 2. Which of these is a fixed cost for the sewing floor?

   Sewing threadFactory rent and salaries of permanent supervisorsButtons and labelsPower for the machines

3. 3. A buyer offers an order that can only be delivered with four weeks of overtime. What should the decision compare?

   Only the overtime wage rateThe full incremental cost — overtime premium, efficiency loss, absenteeism and quality risk — against the contribution the order bringsThe supervisor's opinionThe order's quantity

4. 4. What does simple payback tell you about an investment, and what does it miss?

   Everything needed for a decisionHow many years the savings take to return the cash — but it ignores what happens after payback and the time value of moneyThe machine's maintenance costThe interest rate the bank will offer

5. 5. The monthly power bill is 8% above budget. What does good variance analysis do?

   Report the number and move onFind the cause — machine mix, idle running, tariffs, volume — and decide whether it is a one-off or a trend needing actionCut the next month's budget by 8%Blame the utility company