A Sales Rep Is Paid a Commission on Each Product

question 47

Multiple Choice

A sales rep is paid a commission on each product sold. The commission is:

• A) part of the total fixed cost.
• B) part of the total variable cost.
• C) not included in figuring average cost.
• D) part of the total cost, but not specifically a fixed cost or a variable cost.
• E) None of these alternatives is correct.

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Definitions:

Return On Total Assets

A financial metric that measures the profitability of a company relative to its total assets, indicating how efficiently a company uses its assets to generate profit.

Net Income

The amount of money that remains after all operating expenses, taxes, and costs have been subtracted from total revenues.

Net Sales

Revenue from sales reduced by customer discounts, returns, and allowances.

Held-to-Maturity Debt Securities

Financial instruments that a firm intends and is able to hold until they mature, usually recorded at cost adjusted for amortization.