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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. Regarding fixed and variable costs, what are Finance's primary concerns?

A) Fixed costs must be kept to a minimum, but variable costs can fluctuate since they tend to correlate with revenue.
B) Variable costs often have a heavier focus than fixed costs, which applies to all areas, including compensation.
C) Fixed costs and variable costs are equally important and both should be kept to a minimum.
D) Fixed costs are not a concern because they cannot be changed, so the focus is primarily on variable costs.

2. What best describes a use of strategic analysis?

A) Understanding your business and its competitive strengths and weaknesses
B) Forecasting profit, growth and investment performance to develop realistic budgets
C) Pricing your products appropriately
D) Evaluating prior year performance for the narrative portion of annual financial reports

3. The Delta Company has experienced increased turnover in the past two years. Data from exit interviews indicate that most of those leaving did so for better opportunities and higher compensation. If Delta pays at the highest percentile of the market for their peer group, what data analysis should they do?

A) Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels
B) Qualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns
C) No additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.
D) Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable

4. Which of the following is the best example of a variable cost?

A) Audit fees
B) Rent
C) Shipping
D) Maintenance

5. Until what age does the FLSA limit the number of hours of nonhazardous work? (...as long as the overtime pay provisions are met)

A) 18 years of age
B) 14 years of age
C) 15 years of age
D) 16 years of age

Solutions: