A Company Is Evaluating Which of Two Alternatives Should Be

question 29

Multiple Choice

A company is evaluating which of two alternatives should be used to produce a product that will sell for $35 per unit. The following cost information describes the two alternatives If total demand (volume) is 150,000 units, then the company should

• A) select Process A with a profit of $1,300,000 to maximize profit
• B) select Process B with a profit of $750,000 to maximize profit
• C) select Process A with a profit of $1,000,000 to maximize profit
• D) select Process B with a profit of $1,050,000 to maximize profit

Apply principles of Expectancy Theory to organizational settings.

Recognize the importance of goal setting and its impact on motivation and performance.

Identify the factors that influence employee motivation according to Expectancy Theory.

Understand the implications of Four-drive Theory for organizational behavior and employee management.

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Definitions:

Accrue

The process of recording expenses and revenues that have been incurred or earned, respectively, but not yet received or paid, in order to reflect the true financial position of an entity.

Estimated Loss

An anticipated loss that a company might suffer due to various risks and uncertainties, and which is accounted for in advance.

Appropriation

The allocation or setting aside of funds by a company for a specific purpose or the restriction of retained earnings distributed to shareholders.

Inventory Finance

A line of credit or loan specifically intended to help businesses purchase inventory, often secured by the inventory itself.