A Characteristic of the Straight-Commission Plan for Compensating Salespeople Is

question 95

Multiple Choice

A characteristic of the straight-commission plan for compensating salespeople is that it:

• A)Is a good plan when the product requires considerable presale and postsale service.
• B)Is a good method for paying new salespeople.
• C)Is a good method to use when introducing a new technical product.
• D)Makes it difficult for management to get the salespeople to do a fully balanced sales job.
• E)Is a good plan to use when developing a new territory.

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Definitions:

Standard Hours Allowed

The estimated amount of time that should be required to complete a specific amount of work under normal conditions.

Overhead Volume Variance

The difference between the budgeted and actual overhead costs attributable to a change in production volume.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or production of goods.

Budgeted Overhead

The estimated costs for overhead (indirect costs such as utilities, rent, and administrative salaries) that are planned for during a specific period in the budgeting process.