One Problem That May Cause MBO to Fail Is That

question 47

Multiple Choice

One problem that may cause MBO to fail is that

• A)top management gets too involved in the MBO program.
• B)MBO may lead to problems in achieving adequate supervisory coverage.
• C)performance reviews may become an exercise in punishing employees.
• D)workers may become fatigued because of longer working days.
• E)the objectives are too specific.

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Net Income

An entity's earnings after all expenses, including taxes and operating costs, have been deducted from revenues.

Physical Inventory

The process of counting and verifying the actual quantities of merchandise or goods in stock.

Absorption Cost

An accounting method that assigns all manufacturing costs (both fixed and variable) to products, making them fully absorbed into the cost of goods sold.