The Company Wants to Spend 5% of Sales on the Sales

question 14

Multiple Choice

The company wants to spend 5% of sales on the sales force, the cost of supporting a salesperson is estimated at approximately $127,500 per person, and 15% of the sales force budget is for management and other costs. Using the percent of sales method, calculate the sales force budget, if sales are forecasted to be $12 million.

• A) $420,000
• B) $480,800
• C) $510,000
• D) $600,800
• E) none of the above

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Definitions:

Wal-Mart Stores

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.

Remainderman

The person or entity entitled to receive the remainder of an estate or trust once all prior obligations or life estates are satisfied.

Credit Shelter Trust

A legal arrangement allowing a person to bequeath an amount under the estate tax exemption to beneficiaries other than their spouse, minimizing estate taxes.

Federal Income Tax

The tax levied by the U.S. federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.