Which of the Following Is True Regarding a Profit-Sharing Plan

question 46

Multiple Choice

Which of the following is true regarding a profit-sharing plan?

• A) It prevents union members from sharing the wealth.
• B) It creates a difficulty in maintaining employment levels in marginal organizations.
• C) It becomes ineffective when union members participate in plan development.
• D) Not all unions would be in favor of this type of plan.

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Definitions:

Freight-In

Costs associated with transporting raw materials or goods into a company from suppliers, considered part of the cost of purchasing inventory.

Net Purchases

The total cost of purchases made by a company after deducting any returns, allowances, and discounts.

Cost of Goods Sold

The immediate expenses linked to manufacturing goods for sale within a business, encompassing both materials and workforce costs.

Credit Sales Transactions

Transactions where goods or services are sold to a customer with an agreement that payment will be made at a later date.