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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was
10,500,000. What was the economic value added (EVA) using the EVA formula?

A) 8,000,000
B) 9,700,000
C) 500,000
D) 840,000

2. Employer-sponsored death benefits are most commonly based on which of the following?

A) The employee's health history
B) The employee's annual salary
C) The size of the employee's family
D) The employee's premium contributions

3. What statement is most accurate regarding compensation communications with employees at varying levels?

A) They usually require more detail for senior employees regarding plan details and performance and the needs from one employee group to another can vary greatly.
B) They generally require a greater degree of detail for lower level employees who have less of an understanding of pay plan design.
C) They tend to be fairly consistent because the elements of pay may differ, but the concerns are universal.
D) They should be kept to a minimum for employees at all levels to maximize efficiency and efforts can be focused only on those who have questions.

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

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

5. Which of the following agencies enforces the FLSA?

A) Office of Federal Contract Compliance Programs
B) National Labor Relations Board
C) Equal Employment Opportunity Commission
D) Department of Labor

Solutions: