Question: Suppose a manager is paid a bonus only if standard
Suppose a manager is paid a bonus only if standard absorption-costing operating income exceeds the budget. If operating income through November is slightly below budget, what might the manager do in December to increase his or her chance of getting the bonus?
Answer to relevant QuestionsWhy are companies with small levels of inventory generally unconcerned with the choice of variable or absorption costing?Each department must choose one cost-allocation base to be used for cost application.” Do you agree? Explain.The sales-volume variance (see Chapter 8) highlights the effect on income of sales exceeding or falling short of sales targets. Does the production-volume variance provide parallel information for evaluating the effect of ...Blackstone Tools produced 12,000 electric drills during 20X0. Expected production was only 10,500 drills. The company’s fixed-overhead rate is $7 per drill. Absorption-costing operating income for the year is $18,000, ...The Twin Lakes Company had the following actual data for 20X0 and 20X1:The basic production data at standard unit costs for the 2 years were as follows:Direct materials ........ $16Direct labor .......... 20Variable factory ...
Post your question