In Which of the Following Situations Are Larger Incentive Components

question 45

Multiple Choice

In which of the following situations are larger incentive components appropriate?

• A)when organizations have a highly variable annual performance and employees have jobs that fluctuate greatly in terms of what's expected of them
• B)when organizations have a stable annual performance and employees have jobs that are fairly stable
• C)when organizations work in an unstable external environment and employees have stable jobs with little fluctuations
• D)when organizations have a stable annual performance and employees have jobs that fluctuate greatly in terms of what's expected of them
• E)organizations have a highly variable annual performance and employees have jobs that are fairly stable

---

Definitions:

Direct Labor Variances

The difference between the budgeted or standard cost of direct labor for actual production and the actual cost incurred for direct labor.

Direct Labor

The work of factory employees that can be directly traced to the product being manufactured.

Direct Labor Variances

The difference between the expected (standard) cost of direct labor for actual production and the actual cost incurred.

Direct Labor

Direct labor involves the work of employees who are directly involved in producing goods or services, being a key factor in manufacturing costs.