Which of the Following Steps Can a Management Take to Reduce

question 102

Multiple Choice

Which of the following steps can a management take to reduce the undesirable effects of absorption costing?

• A) It can evaluate managers on quarterly basis rather than the usual yearly period thereby mitigating the undesirable effects of absorption costing.
• B) It can delegate powers to managers to decide which orders they want to accept so that any order which will lead to inventory build-up can be rejected.
• C) It can empower managers to decide the timings of maintenance of plants thereby ensuring that the production is not affected.
• D) It can encourage using nonfinancial measures such as units in ending inventory compared to units in sales.

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Definitions:

Regression Slope

Indicates the steepness and direction of the linear relationship between two variables on a regression plot.

Variance

A calculation of how spread out a data set is, determined by the mean of the squared deviations from the average.

Least Squares Estimates

A statistical method used to determine the line of best fit by minimizing the sum of squares of the errors between observed and predicted values.

Slope

In mathematics and statistics, it represents the rate at which a line inclines or declines, showing the change in the dependent variable for a unit change in the independent variable.