The Performance Measurement System for Employees' Compensation Should Focus on All

question 79

Multiple Choice

The performance measurement system for employees' compensation should focus on all facets of performance to:

• A)ensure that reporting is complete.
• B)encourage gaming of the performance indicator.
• C)provide the highest possible level of internal control.
• D)ensure that employees do not sacrifice performance on unmeasured elements.

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Definitions:

Direct Labor Cost

The expense related to the work of employees directly involved in the production of goods or services, such as wages for assembly line workers.

Direct Labor-Hours

Direct labor-hours are the total number of hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services and are a major component of product costs.

Budgeted Production

The planned level of production output, calculated based on demand forecasts and inventory requirements.