The Most Common Financial Performance Measure Used in Annual Incentive

question 128

True/False

The most common financial performance measure used in annual incentive plans is GAAP net income or some variation thereof.

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Definitions:

Direct Materials

Raw materials that can be directly identified and easily traced to the manufacturing of a product.

Indirect Material

Materials used in the support of the production process but not directly a part of the finished product.

Period Cost

Costs that are expensed in the period in which they are incurred, not directly tied to the production of goods or services.

Goals Met

A term indicating the achievement of predefined objectives or targets.