The Basic Principle of Equity Theory Is That Employees Try

question 53

Multiple Choice

The basic principle of equity theory is that employees try to

• A) maintain equity between inputs and outputs compared to people in similar positions.
• B) ensure that performance standards are fair and attainable.
• C) earn as much as possible with as little work as possible.
• D) achieve the mutually agreed upon goals of management and employees.

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Definitions:

Factory Equipment

This term describes the machinery and tools used in a manufacturing process to produce goods.

Overhead Cost

The ongoing expense of operating a business that is not directly attributed to a specific product or service, such as rent and utilities.

Work in Process Subsidiary Ledger

A detailed account that tracks the costs of unfinished goods in the manufacturing process at any given time.

Job Cost Sheet

A document that records and tracks the costs associated with a specific job or project, including materials, labor, and overhead.