What is the purpose of incentive plans? Describe the characteristics of a successful incentive pay plan.
What will be an ideal response?
To induce employees to be more productive or to attract and retain top performers, many organizations offer incentives, such as commissions, bonuses, profit-sharing plans, and stock options.
An effective incentive pay plan has five characteristics:
1. Simplicity: plan can be explained clearly and quickly
2. Clear goals
3. Realistic goals
4. Consistency with the organization's present goals
5. Regular communication about the plan (feedback)
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Which of the following costs would not be included in factory overhead in the manufacture of a student's desk?
a. The oil used to maintain the machinery. b. The salary of the supervisor of the Assembly department. c. The wood used to form the top of the desk. d. The wages of personnel who perform inspections of incoming materials.
Flexible budgeting is a reporting system wherein the:
a. Statements included in the budget report vary from period to period. b. Budget standards may be adjusted at will. c. Reporting dates vary according to the levels of activity reported upon. d. Planned level of activity is adjusted to the actual level of activity before the budget comparison report is prepared.
Which of the following specific measures of vendor quality would be used when evaluating vendors that supply a company with direct materials?
A) Defect-free material as a percentage of total materials received B) Number of customer complaints C) Time it takes to make a product D) All would be considered to assess vendor quality of direct materials.
________ is a period measure that attempts to capture a firm's ability to add value for shareholders, after accounting for the requirements of other stakeholders
A) Economic Value Added B) Discounted cash flow analysis C) Price-Earnings measure D) All of the above.