Assume That Managers Are Rewarded for Reducing Product Costs as Calculated

question 142

Multiple Choice

Assume that managers are rewarded for reducing product costs as calculated by the accounting system.In keeping with the theme that "you get what you measure," if a company switches its overhead application basis from direct labor hours to machine hours, what would you expect to happen?

• A)Machine hours will increase
• B)Machine hours will decrease
• C)Total costs will increase
• D)Output will reduce

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Definitions:

Labour Market

Labour market refers to the supply of available workers in relation to available employment opportunities and is characterized by the interaction of employers and job seekers.

Comfortable Salaries

Earnings that provide individuals or families with a level of financial security that covers basic needs with additional disposable income for leisure or savings.

Horticultural Societies

Horticultural societies are communities that rely on the cultivation of plants in gardens using hand tools to sustain their way of life.

Subsistence Pattern

The means by which societies acquire the food necessary for survival, including hunting, gathering, herding, and agriculture.