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Which Pay System Would an Organization Likely Use to Establish

question 5

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Which pay system would an organization likely use to establish greater job-staffing flexibility?


Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard hourly wage rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) cost allocated to production, based on the standard variable overhead rate.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, used to measure the efficiency and cost management in labor use.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain amount of output, multiplied by the standard labor rate.

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