When You Pay Someone a Salary for Doing a Poor

question 4

Multiple Choice

When you pay someone a salary for doing a poor job, you are actually:

• A) Punishing the employee.
• B) Avoiding a lawsuit.
• C) Encouraging improvement.
• D) Rewarding poor performance.

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Definitions:

Activity Variance

The difference between the budgeted or planned level of activity or production and the actual level achieved.

Direct Labor

The labor costs directly attributed to the production of goods or services, such as wages paid to assembly line workers.

Budgeting

The process of creating a plan to spend your money, allocating financial resources to various activities, departments, or items over a particular period.

Spending Variance

The difference between the actual amount spent on something and the amount that was planned to be spent, often used in budgeting and financial analysis.