Discuss Worldatwork CECP Exam Topic 1 Question 6

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?

ACompensation costs eventually stabilize and become a consistent percent of revenue.

BCompensation costs and revenue increase at approximately the same rate.

CCompensation costs eventually decrease as a percent of revenue, increasing profit growth.

DCompensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.

Suggested Answer: C

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13 comments · newest first

Xochitl 12 months ago

I thought variable comp would change things more.

Taryn 12 months ago

B seems plausible too, but A is more likely.

Reita 1 year ago

Wait, can fixed costs really stay consistent with rising revenue?

Sunshine 1 year ago

Totally agree, A makes the most sense here!

Viki 1 year ago

A higher fixed comp means costs stabilize as revenue grows.

Johnetta 1 year ago

I think option D makes sense because fixed costs don’t change with revenue, but I’m unsure if they really stay the same until variable costs take over.

Florencia 1 year ago

I’m a bit confused about whether compensation costs would actually decrease as a percentage of revenue. That seems counterintuitive.

Derick 1 year ago

This question feels familiar; I think it relates to how variable compensation can impact profit margins as revenue grows.

Brock 1 year ago

I remember studying how fixed compensation can lead to stable costs, but I'm not sure if that means they stabilize as a percentage of revenue.

Arlie 1 year ago

Ugh, I'm a bit confused by this one. The wording is a bit tricky, and I'm not entirely sure about the syntax for Blue Prism expressions. I'll need to review my notes and try to figure this out.

Angella 1 year ago

I think I remember the term "Turing-complete" being used a lot in our discussions about smart contracts. Isn't that what the Ethereum Virtual Machine is?

Fairy 1 year ago

Okay, I think I've got a handle on this. The key is to identify the business process steps that don't fit the criteria for service encapsulation, like manual steps or those tied to specific business entities.

Luz 1 year ago

This looks like a process improvement scenario. I'm leaning towards C, but I want to make sure I'm not rushing my decision.

Worldatwork CECP Exam - Topic 1 Question 6 Discussion