- 20 Marks
IMAC – APRIL 2022 – L1 – Q4 – Standard Costing and Variance Analysis
Factors for deciding time-based reward systems, measures to ensure task completion, challenges in implementing group bonus schemes, and uses of standard costing.
Question
a) Most organisations use time as a basis to reward their employees, hence they pay their staff on a time basis using clock-in devices. Employers are therefore likely to pay for attendance instead of tasks performed. Accountants believe that employees should be rewarded based on tasks, however, not all tasks can easily be rewarded on a time basis.
Required:
i) State THREE (3) factors that should be considered when deciding to use a time-based reward system. (6 marks)
ii) State THREE (3) measures that can be put in place to ensure that employees do not only report for work but execute their tasks as required. (6 marks)
b) State THREE (3) challenges management may face in implementing group bonus schemes. (3 marks)
c) Standard costing among other advantages is used for performance measurement and control reporting.
Required:
Explain how the above uses of standard costing are measured. (5 marks)
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