If a firm ends its fiscal year with profit,which plan can the firm use to distribute part of the excess to employees?
A) Gainsharing plan
B) Profit-sharing plan
C) Cafeteria plan
D) Insurance plan
E) Salary-sharing plan

Question

Quizplus · Accepted Answer

A profit-sharing plan is designed to share some of the profits of a company with its employees. If the company ends the fiscal year with profit, it can use a profit-sharing plan to distribute part of the excess to its employees based on a predetermined formula. This is a popular way for companies to incentivize employees and share the benefits of success. Gainsharing plans are similar but focus on specific productivity and efficiency goals, while a cafeteria plan is a benefits program that allows employees to choose from a menu of options. An insurance plan and salary-sharing plan are not typically used for distributing excess profits to employees.

If a Firm Ends Its Fiscal Year with Profit,which Plan