A Major Disadvantage of a Straight Commission Plan in Comparison

question 85

Multiple Choice

A major disadvantage of a straight commission plan in comparison to a straight salary plan to the retailer is the ________.

• A) lack of management control over an employee's performance of nonselling tasks
• B) higher possible overall compensation costs
• C) greater incentive to increase productivity
• D) ability to attract better employees due to security

---

Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, reducing its book value on the balance sheet.

Operating Activities

Business activities that relate directly to the production, sale, and delivery of a company's products and services.

Depreciation

The process of allocating the cost of buildings and equipment (but not land) over their productive lives using a systematic and rational method