As a Salesman, Ron's Pay Is Based on a Percentage

question 332

True/False

As a salesman, Ron's pay is based on a percentage of his total sales. This type of pay arrangement is known as a commission.

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Definitions:

Fixed Monthly Expenses

Recurring costs that do not vary in amount and are paid on a monthly basis, such as rent or loan payments.

Net Operating Income

Earnings from a company's core business operations, excluding deductions for interest and taxes.

Margin Of Safety

The excess of budgeted or actual dollar sales over the break-even dollar sales.

Variable Expenses

Variable expenses are costs that change in proportion to the activity of a business, such as sales volume or production levels.