For Which of the Following Products Would the Straight-Commission Plan

question 17

Multiple Choice

For which of the following products would the straight-commission plan of compensation be most appropriate?

• A)Encyclopedias sold door-to-door.
• B)Hammers,wrenches,and nails sold in a hardware store.
• C)Potato chips,corn chips,and pretzels sold by a route salesperson.
• D)Shoes sold in a large department store.
• E)Fax machines sold to the military.

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Definitions:

Net Operating Income

Earnings resulting from the standard operations of a business, without considering taxes and interest expenses.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Advertising Spending

The total amount of money that is allocated towards advertising products or services in various media outlets.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the degree of risk associated with falling sales.