A Firm Has Exceeded Its Revenue Forecast for the Year,and

question 17

Multiple Choice

A firm has exceeded its revenue forecast for the year,and wishes to share some of the surplus with its employees.Which of the following schemes is likely to generate higher levels of satisfaction from the employees?

• A)Giving bi-monthly bonuses,with the each bonus slightly smaller than the previous one.
• B)Giving bi-monthly bonuses,with each bonus slightly larger than the previous one.
• C)Giving bi-monthly bonuses of equal amounts.
• D)Giving one big bonus at the beginning of the year.

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Definitions:

Volume Variance

The difference between the expected (budgeted) volume of production or sales and the actual volume, impacting costs and revenues.

Cooling Coil

A device within an air handling unit or HVAC system used to lower air temperature and remove moisture by passing air over a cold surface.

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the expected (budgeted) costs.

Standard Cost System

An accounting practice that uses predetermined costs for products or services to help managers control expenditures by comparing these standards with actual costs.