Which of the following is a common method to reduce variable costs in a manufacturing process?

Which of the following is a common method to reduce variable costs in a manufacturing process?

• A. Increasing production workforce
• B. Investing in technology for efficiency
• C. Reducing raw material quality
• D. Extending production hours

Answer: (B)

Investing in technology for efficiency is a method that can significantly reduce variable costs in a manufacturing process. When manufacturers integrate advanced technology, they often achieve automation and improved precision, which leads to higher production rates and less waste. This technological upgrade can streamline operations by minimizing labor costs, reducing material waste, and enhancing overall productivity. Over time, the savings generated from increased efficiency can offset the initial investment in technology, contributing to reduced variable costs per unit produced. Other methods mentioned may not lead to a systemic or sustainable reduction in variable costs. For instance, increasing the production workforce might raise labor costs without necessarily improving production efficiency, while reducing raw material quality could compromise product standards and lead to higher costs from returns or defects. Extending production hours might increase output temporarily but can also lead to increased costs for overtime wages and machinery wear.

Investing in technology for efficiency is a method that can significantly reduce variable costs in a manufacturing process. When manufacturers integrate advanced technology, they often achieve automation and improved precision, which leads to higher production rates and less waste. This technological upgrade can streamline operations by minimizing labor costs, reducing material waste, and enhancing overall productivity. Over time, the savings generated from increased efficiency can offset the initial investment in technology, contributing to reduced variable costs per unit produced.

Other methods mentioned may not lead to a systemic or sustainable reduction in variable costs. For instance, increasing the production workforce might raise labor costs without necessarily improving production efficiency, while reducing raw material quality could compromise product standards and lead to higher costs from returns or defects. Extending production hours might increase output temporarily but can also lead to increased costs for overtime wages and machinery wear.