The Managers of Tong Company Receive Performance Bonuses Based on the Profit

question 154

Multiple Choice

The managers of Tong Company receive performance bonuses based on the profit of the firm. Which cost formula are they likely to favour in periods of declining prices?

• A) Estimating inventory method
• B) Average
• C) FIFO
• D) Physical inventory method

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Definitions:

Maslow's Belongingness Need

A psychological requirement for human connection and relationships, considered a fundamental human need in Maslow's hierarchy.

Need for Achievement

A personality trait characterized by an enduring drive for success and the setting of high standards of performance.

Performance Goals

Targets set to achieve a specific standard of proficiency on a task, usually within a predetermined time frame.

Basic Physiological Needs

Fundamental human requirements for survival, such as air, water, food, shelter, and sleep, based on Maslow's hierarchy of needs.