Instruck Inc

question 109

Multiple Choice

Instruck Inc.is a real estate firm based in Colorado.The company ensures that employees' pay is dependent on what they are capable of doing.The company also supports efforts to empower its employees by encouraging them to be independent and making decisions in various areas.This,in turn,ensures job enrichment.Based on this information,identify the pay structure being exemplified in this scenario.

• A) Straight piecework plan
• B) Skill-based pay systems
• C) Merit pay system
• D) Differential piece rates
• E) Standard hour plan

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Definitions:

Absorption Costing

A methodology for product costing that comprehensively adds up the costs of direct materials, direct labor, and both fixed and variable manufacturing overheads.

Variable Costing

An accounting method that only includes variable costs (costs that change with production levels) in the cost of goods sold and treatment of fixed costs.

Production Costs

The total expenses incurred in the manufacture of products, including costs related to labor, raw materials, and overhead.

Variable Production Costs

Expenses that fluctuate with the level of output or production, including costs like raw materials and direct labor.