Pay for Performance Means Employees Must

question 34

Multiple Choice

Pay for performance means employees must

• A)share only in the rewards of a company.
• B)share in the risks as well as the rewards of their employer's business.
• C)share in the risks at the expense of the rewards of their employer's business.
• D)share all aspects of a company's business.
• E)share very little yet gain from any success the company might achieve.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – in the cost of a product.

Contribution Margin

A financial metric that represents the difference between a product's sales revenue and its variable costs.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a unit of product.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a unit of product.