Which of the Following Variables Is NOT Used to Determine

question 38

Multiple Choice

Which of the following variables is NOT used to determine the income level provided to employees upon retirement under a "defined benefit program"?

• A) some variable (percentage) of the average income over a certain period of time, usually three to five years
• B) the company's profit level over a period of three to five years
• C) employees' years of service
• D) employees' salary level

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Definitions:

Fixed Cost

A fixed cost is an expense that does not change with the level of goods or services produced by a business, such as lease payments or insurance premiums.

Sunk Cost

A sunk cost is a past expense that has already been incurred and cannot be recovered. Businesses cannot alter these costs with future decisions.

Uncontrollable Cost

Expenses that cannot be changed or influenced by the actions of a particular department or manager.

Incremental Cost

The additional cost associated with producing one more unit of a product or service.