Ace Products' profits for fiscal year 2005 have exceeded estimates by over 2 million dollars.Ace is distributing part of this excess to employees through a(n)________.
A) gain-sharing plan
B) profit-sharing plan
C) cafeteria plan
D) insurance plan

Question

Quizplus · Accepted Answer

Profit-sharing plans are a type of employee benefit plan in which a portion of the company's profits is distributed to employees as a form of compensation. Therefore, Ace's distribution of excess profits to employees falls under this category. Gain-sharing plans are similar, but focus on distributing cost savings rather than profits. Cafeteria plans and insurance plans are not relevant to this scenario.

Ace Products' Profits for Fiscal Year 2005 Have Exceeded Estimates