Worldatwork Exam CECP Topic 1 Question 74 Discussion

Actual exam question for Worldatwork's CECP exam

Question #: 74
Topic #: 1

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

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

BCompensation costs and revenue increase at approximately the same rate.

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

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

Show Suggested Answer

Suggested Answer: C

by Idella at Nov 14, 2024, 11:18 PM

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Freeman

15 days ago

Haha, I hope they give out bonuses for the right answer. C is the way to go - got to love that increasing profit growth!

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Brock

3 days ago

User 2: Yeah, I agree. It's important for compensation costs to eventually decrease as a percent of revenue.

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Charlene

5 days ago

User 1: I think C is the best option, profit growth is always a good thing.

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Henriette

21 days ago

This is a tricky one, but I'm going with D. The fixed costs stay the same until the variable costs catch up. Gotta love those stable compensation numbers!

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Broderick

23 days ago

C definitely seems the most logical. With a higher percentage of fixed compensation, the costs won't scale up as quickly as the revenue. Time to celebrate with a raise!

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Nickole

26 days ago

That's an interesting perspective, Kristofer. I can see how that could make sense too.

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Johnetta

29 days ago

Hmm, I'm not so sure. I was thinking B might be the right answer since the compensation and revenue should increase at about the same rate.

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Reita

13 days ago

B) Compensation costs and revenue increase at approximately the same rate.

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Chun

16 days ago

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

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Kristofer

30 days ago

I disagree, I believe the answer is C) Compensation costs eventually decrease as a percent of revenue, increasing profit growth.

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Joye

1 months ago

I think the correct answer is C. As revenues increase, the fixed compensation costs will become a smaller percentage of the total, leading to higher profit growth.

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Kenneth

17 days ago

I agree, as revenues increase, fixed compensation costs will decrease as a percentage of revenue.

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Nickole

1 months ago

I think the answer is A) Compensation costs eventually stabilize and become a consistent percent of revenue.

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