The Pinewood Furniture Company Pty Ltd Plans to Manufacture Two

question 90

Multiple Choice

The Pinewood Furniture Company Pty Ltd plans to manufacture two lines of chairs in the coming year-lounge and patio. The company is considering introducing an activity-based costing system. Given below are each activity, its cost and its related activity driver.
The level of activity for the year is:
Under an activity-based costing system, what is the total cost of lounge chairs for the year?

• A) $1 710 000
• B) $1 410 000
• C) $890 000
• D) $1 150 000

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Definitions:

Incentive Compensation Program

A scheme designed to motivate and reward employees based on their performance, aiming to align their interests with the goals of the organization.

Pay-for-Performance

A compensation strategy that links employee remuneration directly with their performance outcomes, intending to motivate and reward high achievers.

Hot Stove Rules

A principle of discipline proposing that consequences for inappropriate behavior should be immediate, consistent, impersonal, and moderate, akin to touching a hot stove.

Employee Discipline

The enforcement of organizational rules and policies to rectify and prevent unacceptable behavior by employees.