Question 1

Who are you most likely to hear from if there are questions about an employee’s compensation?

Options :

A : The employee

B : A concerned co-worker

C : The employee’s manager

D : The employee’s department head

Answer: C

Question 2

What happens to the marginal cost if revenue accelerates slower than variable costs but fixed costs remain the same?

Options :

A : It remains the same.

B : It decreases because variable costs are increasing.

C : It increases at the same rate as variable costs.

D : It becomes increasingly higher as revenues increase.

Answer: D

Question 3

Regarding medical plans, what is the out-of-pocket maximum?

Options :

A : The most that the member will be liable for in relation to co-insurance

B : The maximum the plan will pay if the member is covered by another insurance plan

C : The limit the member will be required to pay at each doctor visit

D : The lifetime limit for benefits to any one employee

Answer: A

Question 4

Regarding fixed and variable costs, what tends to happen as revenue increases?

Options :

A : Variable costs decrease

B : Fixed costs decrease

C : Variable costs increase and consume a higher percent of revenue

D : Fixed costs remain the same and consume a lower percent of revenue

Answer: D

Question 5

Regarding cost analysis of compensation expense, which job is most likely to incur fixed costs for the company?

Options :

A : Production worker

B : Account executive

C : IT contractor

D : HR Director

Answer: D