Morgan Is Working on the Compensation Package for Bank Tellers

question 36

Multiple Choice

Morgan is working on the compensation package for bank tellers.Bank customers like to see the same faces in the bank when they come in to talk about their money.Therefore, Morgan needs to find a way to reduce turnover among the tellers.Adopting a(n) _________ organizational philosophy on compensation might be a good idea.

• A)below-the-market
• B)at-the-market
• C)pay for longevity
• D)wage compression
• E)None of the above

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Definitions:

Differential Cost

Differential cost, or incremental cost, is the difference in total cost that will result from selecting one option over another in decision-making.

Relevant Costs

Relevant costs are those costs that should be considered when making decisions. They are directly affected by the decision in question and can include future costs that will differ among alternatives.

Fixed Manufacturing Expenses

Costs that do not vary with the volume of production, such as rent, depreciation of manufacturing equipment, and salaries of permanent factory staff.

Selling and Administrative Expenses

Expenses incurred from selling products or services and managing the business, excluding production costs.