With which profit sharing formula does the profit sharing pool become funded only after profits exceed a predetermined level,but fall below some established maximum level?

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Quizplus · Accepted Answer

This type of profit sharing formula is called the profitability threshold or sliding scale formula. In this formula, the profit sharing pool is funded only after profits exceed a predetermined level, but fall below some established maximum level. Once profits reach the predetermined level, a percentage of the profits is added to the pool, and this percentage increases as profits increase until they reach the maximum level. This formula incentivizes employees to help increase profits above the predetermined level, as they will not receive any profit sharing until profits exceed that point.

With Which Profit Sharing Formula Does the Profit Sharing Pool