With Respect to Combination Plans for Compensating a Sales Force

question 104

Multiple Choice

With respect to combination plans for compensating a sales force:

• A)Profit sharing should constitute a major segment of the total pay.
• B)Salary plus commission is the best pay plan for salespeople.
• C)The level of compensation should be set high enough so that the reps can pay their own travel expenses.
• D)A bonus should not be used in pay plans,mainly because they are misunderstood and often used incorrectly.
• E)None of these is correct.

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Definitions:

Recordkeeping

The maintenance of records, including the processes of creating, storing, and managing documents.

Technology

The application of scientific knowledge for practical purposes, especially in industry, which includes machinery, equipment, methods, and processes.

Cost-benefit Constraint

A principle that considers whether the cost of implementing a decision outweighs the benefits derived from it.

Disclosure

The process of making essential financial information known to shareholders, regulators, and the public.