Which of the Following Statements About Commission Systems of Compensation

question 117

Multiple Choice

Which of the following statements about commission systems of compensation is false?

• A)They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort.
• B)During sluggish periods, an employer's payroll expenses will decline along with sales.
• C)If workers are paid on the basis of the number of units produced, they may become less concerned about quality.
• D)The lack of income stability will induce the more productive workers to leave in search of more secure employment.

Grasping the importance and the method of monitoring activity-based performance measures.

Assessing quality costs within a manufacturing setup.

Understanding the concept and importance of value-added activities in enhancing customer and business value.

Appreciating the relevance of life cycle budgeting and its impact on cost management and strategic financial planning.

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Definitions:

Annual Dividend

The total amount of dividends a shareholder receives per share within a year.

Market Rate

The prevailing interest rate available in the marketplace for securities or loans of a similar risk and maturity profile.

Constant Dividend

A dividend policy in which a company pays a fixed amount in dividends to shareholders permanently or over a long period.

Required Return

The lowest profit anticipated by an investor from a specific investment, considering the associated risks.