Kelsey, Inc

question 138

Multiple Choice

Kelsey, Inc. produces plastic grocery bags. Kelsey has developed a static budget for the month of August, which is based on 8,000 direct labour hours. During the quarter, the actual activity was 9,000 direct labour hours. Data for August are summarized as follows:

-Refer to the Figure.Which of the following can be concluded when comparing the static budget to the actual costs?

• A)The manager spent more than should have been spent.
• B)Immediate action is needed to reduce costs.
• C)The plant manager was clearly not efficient.
• D)The salary of the plant supervisor is fixed.

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Definitions:

Registered Retirement Savings Plan

A retirement savings and investing tool for employees and the self-employed in Canada, offering tax benefits.

Pay-as-you-go Philosophy

A financial strategy where expenses are paid for as they occur, rather than using credit or accumulating debt.

Reward Philosophy

An organization’s formal approach to managing employee compensation, benefits, and recognition in alignment with overall business strategy.

Earnings Philosophy

The underlying beliefs and principles that guide how an organization compensates its employees, reflecting values concerning fairness, performance, and the market.