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Hats Produces Sun Visors

Question 40

Multiple Choice

Hats produces sun visors. Production data for the first month follow:
Hats produces sun visors. Production data for the first month follow: -The production manager will receive a 3% salary bonus if production costs per unit under $3.00. After reviewing October results, he decides to increase production in November to 21,000 units. If demand for the product is stable, which accounting method is the company most likely using to determine the manager's bonus?</para> A) Variable costing B) Absorption costing C) Neither D) Both would yield the same bonus.
-The production manager will receive a 3% salary bonus if production costs per unit under $3.00. After reviewing October results, he decides to increase production in November to 21,000 units. If demand for the product is stable, which accounting method is the company most likely using to determine the manager's bonus?


A) Variable costing
B) Absorption costing
C) Neither
D) Both would yield the same bonus.

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