Which of the Following Forms of Manager Compensation Most Likely

question 52

Multiple Choice

Which of the following forms of manager compensation most likely encourages managers to take a long-term view of how their performance ties in with the long-term goals of a company?

• A) Year-end cash bonus
• B) Base salary
• C) Stock options
• D) Use of a company car

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Definitions:

Process Costing

An accounting method used to allocate costs to units of product in industries where production is continuous and units are indistinguishable, such as in chemicals or food production.

Weighted-Average Method

A cost accounting method that calculates the cost per unit by combining the costs of two or more similar items in the inventory, and dividing the total cost by the total number of units.

Equivalent Unit

A concept used in cost accounting to express the amount of work done on inventory in terms of fully completed units.

Process Costing

An accounting methodology used in industries where production is continuous and costs can be assigned to specific processes or departments in the production cycle.