Peter Was Recently Hired as a Salesman for a National

question 370

Multiple Choice

Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. Which of the following is a strategy the consulting firm may employ to discourage Peter from shirking his responsibilities?

• A)Tell Peter that the shareholders want to earn a large profit this year.
• B)Stop paying Peter bonuses based on how much he's sold.
• C)Allow Peter to set his own schedule and work from home frequently.
• D)Pay Peter an above-equilibrium wage.

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Definitions:

Activity-Based Budgeting

A budgeting method where activities that incur costs in every department of an organization are recorded and their budgets are prepared.

Expected Activities

Forecasted or anticipated actions taken by an individual, group, or organization that aim to achieve certain goals or outcomes.

Financial Statement Effects

The impact of business transactions and events on the financial statements, reflecting changes in financial position.

Budgeted Income Statement

A financial forecast that projects a company's revenue, expenses, and net income for a given period.