Which of the Following Is Characteristic of Profit Sharing Programs

question 98

Multiple Choice

Which of the following is characteristic of profit sharing programs?

• A)Employers are encouraged to think like employees.
• B)Organizations feel the need to rely on layoffs during tough times.
• C)Payments do not become part of base pay in such programs.
• D)Labor costs automatically increase during difficult economic times.
• E)Employees' self-interest is encouraged when using such plans.

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Definitions:

Variance Account Balances

The difference between budgeted and actual figures in accounting, requiring analysis to manage and adjust financial performance.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including labor, material, and overhead expenses.

Fixed Budget

A budget that remains unchanged over the budget period regardless of changes in the level of activity.

Variances

Variances refer to the differences between planned, budgeted, or standard costs and the actual costs incurred, indicating deviations in financial and operational performance.