Jack Is in the Process of Implementing a Gainsharing Plan

question 109

Multiple Choice

Jack is in the process of implementing a gainsharing plan for his firm.He has already determined that the plan's objectives will be to lower labor costs.What is the next step that Jack needs to take?

• A) choose specific performance measures
• B) decide on a funding formula
• C) decide how often to pay bonuses
• D) select the form of payment
• E) develop an involvement system

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Definitions:

Break-even Point

The financial stage at which total revenues equal total expenses, indicating that a business is neither making a profit nor incurring a loss.

Variable Expenses

Costs that change in proportion to the level of activity or volume of production.

Sales

The transactions involving the exchange of goods or services for payment.

Net Operating Income

A measure of profitability that calculates the difference between a company's operating revenue and its operating expenses, excluding taxes and interest.