Agents prefer a behavior-based contract when . they are inclined to take more risksb. job outcomes are more measurablec. they desire higher compensationd. outcome uncertainty is highe. jobs become less programmable

Agents prefer a behavior-based contract when outcome uncertain is high. A behavior-based contract is when employees of an organization are classified by monitoring their behavior in situations. Some situations that are measured by behavior are monitoring how salespeople are involved in activities and how they end. How different management strategies correlate with their team and so on. The outcome is high for what may happen based on the behavior of the different individuals.

Variable costs in current year:

= Variable Cost of goods sold + Variable Selling expense + Variable Admin expenses

= (5,046,000 * 60%) + (2,523,000 * 50%) + (1,508,000 * 30%)

= 3,027,600 + 1,261,500 + 452,400

= $4,741,500

Fixed costs:

= (Total cost of goods sold + Total selling expenses + Total admin expenses) - Variable expenses

= (5,046,000 + 2,523,000 + 1,508,000) - 4,741,500

= $4,335,500