Additional Case 10.2

question 116

Multiple Choice

Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
-Refer to Additional Case 10.2.Which of the following,if true,best supports the use of market data rather than internal job evaluations to determine the value of jobs at O'Donnell?

• A) Turnover at O'Donnell is relatively low.
• B) Most jobs at O'Donnell are typical for the industry.
• C) The organizational structure at O'Donnell is flat.
• D) Most lower-level positions at O'Donnell are exempt.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products based on a pre-established criterion, such as labor hours or machine hours.

Direct Labor-Hours

The number of hours worked by employees directly involved in the production process.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on estimated costs.

Machine-Hours

An indicator of the duration a machine is in use over a specific timeframe.