Profit-Sharing and ESOP-Type Compensation Plans Feature Some Significant Drawbacks,such As

question 37

Multiple Choice

Profit-sharing and ESOP-type compensation plans feature some significant drawbacks,such as:

• A) having only a limited effect on organizational productivity.
• B) increasing internal competition among employees.
• C) generating labor-management conflicts.
• D) increasing corporate tax responsibilities.

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Definitions:

Manufacturing Overhead

Expenses tied to the production process that do not include direct labor or materials are known as indirect costs.

Variable Costs

Variable costs are expenses that vary directly with the level of production or sales volume, such as materials and labor.

Fixed Costs

Costs that do not vary with the level of production or sales, remaining constant regardless of business activity levels.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders.