Portman Company's Activity for the First Three Months of 2013

question 28

Multiple Choice

Portman Company's activity for the first three months of 2013 are as follows: $\begin{array}{lll}&\text { Machine Hours }&\text { Electrical Cost }\\\text { January } & 2,100 & \$ 3,600 \\\text { February } & 2,600 & \$ 4,350 \\\text { March } & 2,900 & \$ 4,800\end{array}$ Using the high-low method, how much is the cost per machine hour?

• A)$1.50
• B)$2.25
• C)$1.69
• D)$1.34

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Definitions:

Link Performance Pay

A compensation strategy that ties salary or bonuses to the achievement of specific performance metrics or objectives.

Piece Rate Plans

Compensation systems where employees are paid based on the quantity of work completed or units produced, which can motivate higher productivity.

Merit Pay

A compensation strategy that provides salary increases or bonuses based on employee performance achievements.

Standard Hour Plans

Compensation systems where workers are paid based on a fixed rate for each unit of production completed within a standard time.