Identify the Disadvantage of Using Profit-Sharing Plans

question 82

Multiple Choice

Identify the disadvantage of using profit-sharing plans.

• A) They cannot be used to improve the organization's performance as a whole.
• B) The employees may develop a narrow view of their roles in the organization.
• C) They cost more when the organization experiences financial difficulties.
• D) Sharing profit with the employees ultimately reduces the organization's profitability.
• E) Profit sharing is not directly linked to individual behavior.

Understand the implications of accepting special orders on company operations.

Comprehend the concept of sunk costs and how they influence financial decisions.

Apply cost concepts in product pricing, including markup and target costing.

Identify and calculate fixed and variable costs in different scenarios.

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Definitions:

Optimum

The most favorable condition or level for growth, reproduction, or success, often used in contexts of efficiency or economic well-being.

Income

The monetary payment received for work or through investments, including wages, salaries, or dividends.

Shirt

A shirt is a piece of clothing for the upper body, usually with sleeves and a collar.

Normal Good

A good for which demand increases as the consumer's income rises and decreases as the consumer's income falls.