Using a Straight Salary to Compensate Salespeople Is Most Likely

question 25

Multiple Choice

Using a straight salary to compensate salespeople is most likely ineffective because it ________.

• A) discourages sales flexibility
• B) lacks connection to performance
• C) makes it too easy to switch territories
• D) is not linked to product training
• E) depends on company profits

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Definitions:

Machine Hours

A measure of production or work performed, calculated as the number of hours a machine is operated.

Lease

A contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset for a specified period in exchange for payment.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced, representing the average cost per unit of output.

Marginal Cost

The amount spent on producing an incremental unit of a product or service.