Using the PAT Perspective of Managers' Behaviour,the Effect of Paying

question 4

Multiple Choice

Using the PAT perspective of managers' behaviour,the effect of paying managers a fixed income salary is that:

• A) They will feel secure enough to accept risky projects for the organisation.
• B) They will prefer not to have the organisation take on debt.
• C) They will be free to consider the optimal investment options for the organisation from the perspective of the principals.
• D) They will feel secure enough to accept risky projects for the organisation and they will be free to consider the optimal investment options for the organisation from the perspective of the principals.
• E) None of the given Answers.

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Definitions:

Standard Cost System

A method of cost accounting that compares actual costs to predetermined standards, facilitating variance analysis to manage costs.

Standard Amount

The budgeted or pre-determined cost of materials, labor, and overhead that is used as a benchmark for actual costs.

Variable Manufacturing Overhead

The segment of manufacturing overhead expenses that fluctuates in relation to the volume of production output.

Actual Output

The real quantity of goods or services produced by a company, as opposed to planned or potential output.