Question

What is the key difference between target plan bonus and predetermined allocation​ bonus?

a. target plan bonuses are determined in​ advance, but predetermined allocation bonuses can fluctuate.
b. target plan bonus amounts are smaller than predetermined allocation bonuses.
c. predetermined allocation bonuses are​ fixed; target plan bonuses are not.
d. predetermined allocation bonuses are smaller than target plan bonuses.
e. predetermined allocation bonuses are not determined by the board of​ directors, but target plan bonuses are?

Answer 1

What is the key difference between target plan bonus and predetermined allocation​ bonus? Predetermined allocation bonuses are​ fixed; target plan bonuses are not.

Predetermined allocation bonus are a fixed rate and they are based on a total from the bonus pool of a company. The target plan bonus can increase or decrease with performance.