When Variances Are Used as an Input to the Performance

question 11

Multiple Choice

When variances are used as an input to the performance evaluation system, which of the following scenarios may be encountered?

• A)Purchasing managers may buy too much inventory to get a bulk purchase discount
• B)Purchasing managers may buy lower quality materials to generate a favorable price variance
• C)If standards are set at easily achievable levels, some people will only do enough to meet the target, but no more
• D)When labor efficiency is measured on a team or production cell basis, the free rider may take advantage
• E)All of the above

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Definitions:

Multiple Unions

The presence of more than one labor union within a single workplace or industry, each representing different groups of workers.

Right-to-Work Law

Legislation that prohibits agreements between labor unions and employers that make union membership or payment of union dues a condition of employment, either before or after hiring.

Union Representation

The act of acting on behalf of union members in negotiations with employers, usually regarding work conditions, wages, and other employment issues.

Initial Contract

The first agreement negotiated between a union and an employer outlining wages, hours, and working conditions for unionized employees.