What Is the Major Limitation of a SIMPLE Retirement Plan

question 19

Multiple Choice

What is the major limitation of a SIMPLE retirement plan?

• A)It is limited to firms with 100 or fewer employees.
• B)Employee contributions to the plan are limited.
• C)SIMPLE plans are subject to all payroll taxes.
• D)SIMPLE plan funds must be invested in stock market securities.

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Definitions:

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or sales activities.

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the quantity of output produced.

Average Fixed Cost

The fixed costs of production divided by the number of units produced, showing how fixed costs per unit change with changes in output.

Average Total Cost

The per-unit cost of production, calculated by dividing the total cost by the total quantity of output produced.