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The FSOJ Company Undertakes the Following Activities in Its Production

question 53

Multiple Choice

The FSOJ Company undertakes the following activities in its production operation and incurred the following costs during the first half of 2010: Processing the juice into 3 final products involves the use of 2 machines, each of which incurred depreciation costs of $15,000 for the first half of 2010. Each product requires a different set up on the processing machines, so FSOJ normally sets up the machines to produce concentrate for the first week of each month. The machine is then set up to produce orange juice for the next 2 weeks. Finally, workers set up the same machines to produce orange icey-poles during the last week of each month.
During the first half of 2010, 20% of the oranges harvested were turned into orange juice concentrate, 50% were processed into orange juice, and 30% became orange icey-poles. The relative sales values of each product were: 75% for orange juice, 20% for orange juice concentrate, and 5% for icey-poles. The orange juice concentrate operation takes up 40% of FSOJ's total factory space. Regular orange juice and orange icey-poles occupy 35% and 25%, respectively.
Preparing oranges for processing involves peeling and removing seeds. The best cost driver for the cost of preparing oranges for processing would be

Definitions:

Expectancy Theory

A motivational theory explaining that an individual's motivation is based on their expectations about their ability to perform tasks and receive desired rewards.

Employee Motivation

How much energy, commitment, and creative thought the workforce of a business displays in their job roles.

Goal Setting

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives that guide the direction and focus of an individual or organization.

Role Perceptions

Individual beliefs about what is expected from them in their role, including their duties, responsibilities, and the scope of their job.