In Equity Theory Propositions, If Paid According to Quantity of Production

question 105

Multiple Choice

In equity theory propositions, if paid according to quantity of production, underrewarded employees will produce a_____________ units in comparison with equitably paid employees.

• A)small number of low quality
• B)large number of high quality
• C)small number of high quality
• D)large number of low quality

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of units for sale during a period by averaging the costs of all similar goods available.

Equivalent Units

A concept used in cost accounting to standardize the amounts of work done on incomplete units, to fully completed units, thereby enabling a consistent cost analysis.

Overhead Allocation

The process of assigning indirect costs of production, such as utilities and rent, to specific cost objects like products or departments.

Factory Overhead

The indirect costs associated with manufacturing, such as utilities, maintenance, and salaries for production supervisors.