Higbee Farm Implements One Location,a Rural Iowa Area

question 88

Multiple Choice

Higbee Farm Implements one location,a rural Iowa area.Higbee has been experiencing slow sales of tractors and other expensive large agricultural equipment such as combines over the last few years because of the low profitability of the farms in its sales region.In order to increase its profits by increasing the sales of equipment,Higbee has announced that the salesperson who writes the highest dollar volume in sales contracts will win an all-expense-paid trip to Hawaii for two for a month.Naturally,this has motivated the sales staff.What is the likely result of this contest?

• A) The Higbee sales staff will work together smoothly as a team to meet local farmers' equipment needs.
• B) Higbee's salespersons will pressure farmers to buy machinery they do not really need.
• C) Higbee's system for measuring performance is contaminated.
• D) This is a "rank and yank" system and will result in Higbee's sales staff becoming demoralized.

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Definitions:

Ending Inventory

The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold at the end of an accounting period.

Perpetual Inventory System

An accounting method that records inventory purchases and sales in real time, providing a continuous account of inventory levels.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.