Given the Following Information

question 31

Multiple Choice

Given the following information:
Compensation - $90,000 Direct Communications - $5,000
Automobile - $7,000 Meals & entertainment - $6,000
Overhead - $12,000 Promotional materials - $10,000
Calls per day - 5 Profit margin - 10%
Net selling days - 200
-Calculating cost-per-call is an important step in addressing the minimum customer size issue. Cost per call is a function of:

• A) the number of calls made per day.
• B) a salesperson's direct selling expenses.
• C) gross margin.
• D) both a and
• E) all of the above.

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Definitions:

Widgets

A hypothetical or generic product often used in economic examples and problems to represent any type of good or service.

Externalities

Costs or benefits arising from an economic activity that affect bystanders and are not reflected in market prices.

Distortionary Taxes

Taxes that cause changes in behavior and decision-making, leading to inefficiencies in the market.

Nonneutral Taxes

Taxes that disproportionately affect one group or type of economic activity over another, often used to influence market outcomes.