WorldatWork Regulatory Environments for Compensation Programs C1 Question # 20 Topic 3 Discussion

WorldatWork Regulatory Environments for Compensation Programs C1 Question # 20 Topic 3 Discussion

C1 Exam Topic 3 Question 20 Discussion:
Question #: 20
Topic #: 3

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?


A.

Compensation costs eventually stabilize and become a consistent percent of revenue.


B.

Compensation costs and revenue increase at approximately the same rate.


C.

Compensation costs eventually decrease as a percent of revenue, increasing profit growth.


D.

Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.


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