Briefly Discuss Two Methods of Reducing the Undesirable Incentives Associated

question 63

Essay

Briefly discuss two methods of reducing the undesirable incentives associated with the use of absorption costing to evaluate the performance of a plant manager.

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Definitions:

Maturity Date

The final day of a note on which the borrower (the maker of the note) pays the face value and any interest due to the holder of the note. The due date.

Dollar Amount

The specific value of a transaction or balance in currency terms.

Interest Earned

The income received from investing in financial instruments or depositing money in interest-bearing accounts.

Accrued Interest

Interest earned from the last payment date to the purchase date.