Which Incentive Scheme Would Simultaneously Elicit Accurate Information About Feasible

question 103

Multiple Choice

Which incentive scheme would simultaneously elicit accurate information about feasible plant production levels and motivate managers to perform up to potential (in the following schemes, B is the bonus payment, Q is actual plant output, and Q_f is the manager's estimate of feasible output) ?

• A) B = 0.4Q
• B) B = 0.4(Q - Q_f)
• C) B = 0.4Q_f + 0.3(Q - Q_f) if Q > Q_f
• D) B = 0.4Q_f - 0.6(Q - Q_f) if Q < Q_f
• E) B = 0.4Q_f - 0.6(Q - Q_f) if Q > Q_f

Identify and calculate variable manufacturing overhead variances, including rate and efficiency variances.

Determine the total standard cost per unit for a product.

Calculate the standard hours allowed for actual output.

Analyze the impact of manufacturing variances on production costs and efficiency.

---

Definitions:

Nasal Cavity

The hollow space within the nose through which air passes, lined with mucous membrane and responsible for filtering, warming, and humidifying inhaled air.

Ventilation

Movement of gases into and out of the lungs.

Nasopharynx

The upper part of the throat that connects the nasal cavities to the throat, playing a crucial role in respiration and vocalization.

Uvula

The fleshy extension at the back of the soft palate that hangs above the throat, playing a role in speech and swallowing.