Dana, HR Manager at a Small Company, Must Communicate to an Employee

question 128

Multiple Choice

Dana, HR manager at a small company, must communicate to an employee that his request for a raise cannot be fulfilled, considering his productivity rates. Which of the following lines would best serve as a buffer for this message?

• A) We would love to grant your request but your productivity is really not up to the mark this year.
• B) We have decided that, considering your productivity rate, we cannot give you the raise that you had requested.
• C) You are doing a great job out there and we would like to commend you on your performance.
• D) After receiving your request for a raise, we did a careful evaluation of your productivity levels over the course of the last year.

Recognize the impact of different costing methods (FIFO, LIFO) on inventory valuation and cost of goods sold.

Understand the process of recording costs transferred within departments and determining end period work in process balances.

Master the calculation of equivalent units of production for both conversion costs and material costs using the weighted average and FIFO methods.

Learn to compute per-unit costs for both conversion and direct materials.

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of production, based on estimated costs rather than actual costs.

Volume Variance

A measurement of the difference between the actual production volume and the expected (or budgeted) production volume, affecting the costs incurred.

Variable Component

A cost associated with the production of goods or services that varies with the level of output or sales.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to apply manufacturing overhead costs to products by estimating fixed and variable manufacturing overhead costs for the coming period.