Managers should consider possible interactions between incentives and variances because:
A) Research has shown that variance analysis reduces employee morale
B) Activities affect more than one department and incentives in one department may cause unfavourable variances in another department.
C) Rewards based on standard costs reduce organisational effectiveness.
D) All of the above

Question

Quizplus · Accepted Answer

Incentives in one department can indeed impact the performance and outcomes in another, leading to unfavourable variances. This interconnectedness necessitates careful consideration of how incentives are structured across departments to ensure they align with overall organizational goals and do not inadvertently create negative outcomes elsewhere.

Managers Should Consider Possible Interactions Between Incentives and Variances Because