What main indicators should firms examine in the process of examining compensation costs?
A) budgeted costs and actual costs
B) compensation cost ratios and budget ratios
C) net profit per employee and average employee earnings
D) compensation cost ratios and average employee earnings

Question

Quizplus · Accepted Answer

The main indicators that firms should examine in the process of examining compensation costs are compensation cost ratios and average employee earnings. Compensation cost ratios indicate the proportion of total compensation costs to the total cost structure of the firm. Average employee earnings give a clear idea of the compensation structure of the company, which includes salaries, bonuses, and benefits. Therefore, these two indicators help in understanding the overall compensation cost of the firm, and how it affects the finances of the company.

What Main Indicators Should Firms Examine in the Process of Examining