Rewarding Employees in One Production Department for Meeting or Exceeding

question 80

Multiple Choice

Rewarding employees in one production department for meeting or exceeding standard cost benchmarks can create new sets of problems for organizations. Which of the following is not one of them?

• A) An unfavorable efficiency variance because of rework needed on work from another department
• B) Variances in another production department
• C) Unmotivated employees in that production department
• D) Poor quality finished goods

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Definitions:

Monopsonist

A market condition where there is only one buyer for a product or service, giving that buyer significant control over the market.

MRP

Stands for Material Requirements Planning, a system used for production planning, scheduling, and inventory control.

MRC

The Marginal Resource Cost, which is the additional cost incurred by producing one more unit of a good or service.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to sell.