The Standard Rate of Pay Is $20 Per Direct Labor

question 226

Multiple Choice

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117600 for 6000 direct labor hours worked the direct labor price (rate) variance is

• A) $2400 unfavorable.
• B) $2400 favorable.
• C) $3000 unfavorable.
• D) $3000 favorable.

Recognize the significance of aligning compensation strategies with organizational goals.

Distinguish between extrinsic and intrinsic rewards and their impact on employee motivation.

Appreciate the complexities and challenges involved in designing an optimal reward system.

Know the initial steps and strategies in formulating a compensation plan.

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Definitions:

Salaries Payable

An account representing the amounts owed to employees for work performed but not yet paid.

Price/Earnings Ratio

A valuation metric for a stock, calculated by dividing the market price per share by the earnings per share.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Long-Run Safety

The assurance of safety and risk reduction measures over an extended period, aiming for sustainable protection against accidents or harm.