When Objective Performance Measures Are Unavailable but the Company Still

question 60

Multiple Choice

When objective performance measures are unavailable but the company still wants to base pay on performance, it uses a(n)

• A) gainsharing plan.
• B) profit-sharing plan.
• C) individual incentive plan.
• D) merit pay system.
• E) stock option plan.

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Definitions:

Work In Process Inventory

Inventory that represents partially completed goods which are still in the production process.

Added To Production

Refers to the materials, labor, or overhead costs that are incorporated into the manufacturing process to produce goods.

Process Costing

A costing method typically used in industries where production is continuous, assigning costs to units of product based on the processes or stages they go through.

Conversion Costs

The costs associated with converting raw materials into finished goods, including direct labor and manufacturing overhead.