A Company Uses Two Plants to Produce Motorcycles

question 80

Essay

A company uses two plants to produce motorcycles. Plant A produces 200 per week using 20 workers and 4 machines. Plant B produces 250 per week using 10 workers and 10 machines. Which plant is more productive?

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Definitions:

Factory Overhead

Indirect manufacturing costs not directly tied to specific units produced, including maintenance, utilities, and salaries of supervisory staff.

Administrative Expenses

Costs related to the general administration of a business, such as salaries of senior executives, accounting, and human resources, that are not directly tied to any specific business activity.

Period Cost

Expenses recognized in the accounting period when they are incurred, not directly linked to production activity.

Selling

The process of persuading a customer to buy a product or service, often involving identifying customer needs, presenting solutions, and closing the sale.