Suppose a Dangerous Workplace Is Made Safer Through the Installation

question 82

Multiple Choice

Suppose a dangerous workplace is made safer through the installation of guards and other equipment that reduce the physical hazards of the work environment. If we observe no reduction in injuries, we might conclude that

• A) the safety equipment isn't adequate and better equipment should be installed.
• B) the firm has responded by lowering wages and hiring less capable people who are more likely to be injured.
• C) the injury rate before installation of the safety equipment had been underreported.
• D) workers responded to the safer environment by not exercising as much care themselves, generating more injuries than if they had not changed their behavior.

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Definitions:

ABC Implementation

The process of applying Activity-Based Costing, an accounting method that assigns costs to activities based on their use of resources.

Uncertainty

A condition characterized by a lack of sufficient knowledge, making it difficult to precisely identify the current situation, predict future events, or acknowledge multiple potential outcomes.

Outdated Costing System

A costing system that no longer accurately reflects the current production operations or costs, leading to misinformed pricing or investment decisions.

Profit Margins

The percentage of revenue that remains as profit after all expenses have been deducted from sales.