Management Is Considering Replacing an Existing Sales Commission Compensation Plan

question 72

Multiple Choice

Management is considering replacing an existing sales commission compensation plan with a fixed salary plan.If the change is adopted,the company's

• A)break-even point must increase.
• B)margin of safety must decrease.
• C)operating leverage must increase.
• D)profit must increase.

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Definitions:

Federal Tax Returns

Documents filed with the IRS that calculate taxable income, report taxes owed, and detail financial information for tax assessment purposes.

Certificate of Dissociation

A legal document that formalizes the withdrawal of a partner from a partnership, detailing the terms of their exit and the continuation of the partnership.

Partnership

A legal form of business operation between two or more individuals who share management and profits. The partners are personally liable for the debts and obligations of the business.

Liability

A legal responsibility for one's actions or the obligation to make restitution for harm caused to others.