Employees Should Not Wonder Why Some People Get Bonuses or Get

question 64

True/False

Employees should not wonder why some people get bonuses or get promoted and others do not-the requirements,procedures,and decision making processes should be clear and understood and decisions thoroughly explained.

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—in the cost of a product.

Variable Costing Income Statement

An income statement format that deducts only variable costs from sales to compute contribution margin, followed by the deduction of fixed costs to determine net income.

Net Operating Income

The profit generated from the normal operational activities of a business, excluding other income and expenses such as interest and taxes.

Variable Costing

An accounting technique that calculates the cost of a product by considering only costs that fluctuate with the level of production, excluding fixed costs.