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Which of the following measures would not help managers to control and improve operations?
a. yield trends
b. cost trends of a product
c. commissions paid per time period
d. units produced per time period
Choose the best answer!
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♦ Relevant knowledge
The commission that gives an employee with a predetermined proportion of sales in remuneration as well as his salary is known as the straight commission. The amount of commission and the sales amount are highly correlated, and it encourages employees to increase sales.
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Explanation for
correct answer
Commissions paid per time period are selling expenses, and not production related. This cost is not related to production and would therefore not be helpful for managers in controlling and improving operations.
Explanation for
incorrect answer
The yield trends can be used to estimate the production volume. The cost trends can be used to estimate production costs. Cost per unit can be determined by comparing the units produced over a time period. All these options allow managers to manage and improve their operations.