A Good Plan for Compensating a Sales Force Should

question 24

Multiple Choice

A good plan for compensating a sales force should:

• A)Strive to correlate a sales representative's rewards with his or her results and efforts.
• B)Provide a regular (steady)income or an incentive income,but not try to do both.
• C)Equate the level and the method of compensation.
• D)Discourage a sales representative from spending time on non-selling activities.
• E)Not be used to control sales force activities.

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Definitions:

FOH Budget Variance

The difference between the actual factory overhead costs incurred and the budgeted overhead costs set at the beginning of a period.

Fixed Manufacturing Overhead

Costs associated with production that remain constant, regardless of the scale of production output, including salaries of managerial staff and depreciation of factory equipment.

Fixed Overhead Applied

The portion of the estimated fixed overhead costs charged to production over a specific period based on a predetermined rate.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products, based on a planned level of activity or volume.