Your Boss Thinks You Should Implement a Salary Plus Commission

question 27

Multiple Choice

Your boss thinks you should implement a salary plus commission plan. You have a meeting with her to outline the drawback(s) of this type of plan. Among the drawback(s) you will discuss include:

• A) more complicated to explain to salespeople.
• B) more costly to administer.
• C) sales managers lose control in direct proportion to the amount of commissions paid.
• D) If an incentive ceiling is put in place, it could dampen some salespeople's motivation.
• E) all of the above.

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Definitions:

Contractual Agreement

A legally binding agreement between parties that outlines the terms and conditions of their arrangement and obligations.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, where the investment is recorded at cost and adjusted according to the investor's share of the investee's profit or loss.

Proportionately Adjusted Balance Sheet

Proportionately Adjusted Balance Sheet involves adjusting the assets, liabilities, and equity of a company in a balance sheet to reflect a fair representation of financial position post any significant changes.

Miscellaneous Assets

Assets that don't fit into the standard categories of financial assets, often including long-term value items that are unique or irregular.