Jerry and His Brother Joe Both Work in Manufacturing Plants

question 53

Multiple Choice

Jerry and his brother Joe both work in manufacturing plants, but Jerry gets a regular paycheck, whereas Joe is paid according to the number of items he produces. The difference between the way that Jerry gets paid and the way Joe gets paid is the difference between ________ schedules.

• A) fixed interval and fixed ratio
• B) fixed interval and variable ratio
• C) variable interval and fixed ratio
• D) variable interval and continuous
• E) variable interval and variable ratio

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Definitions:

Cost of Goods Sold

Costs directly linked to the production of goods a company sells, such as materials and labor.

Direct Materials Purchases

The total cost of raw materials bought that are intended to be used in the manufacture of products.

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding direct labor and direct materials.

Capital Expenditures Budget

A plan for a company's spending on fixed assets, such as buildings or equipment, over a period.