What incentives does each pay system provide for sales force

Assignment Help Accounting Basics
Reference no: EM131815856

Question: Sales Compensation, Variable/Fixed Costs, and Ethics Most companies compensate their sales forces with a combination of a fixed salary and a commission that is a percentage of sales. Consider two companies competing for the same customers-for example, Kellogg's and Post cereals. Suppose that Kellogg's pays its sales force a large fixed salary and a small commission, while Post pays its sales force a small fixed salary and a large commission. The total pay on average was the same for both companies.

1. Compare the sales cost structure of Kellogg's with that of Post. Which has the larger fixed cost? Which has the larger variable cost? How will this affect each company's risk? (Focus on how the company's profits change with changes in volume.)

2. What incentives does each pay system provide for the sales force?

3. Might either incentive system create potential ethical dilemmas for the sales personnel? Explain.

Reference no: EM131815856

Questions Cloud

Assume that the population variance is unknown : Assume that the population variance is unknown. We test the hypothesis that Ho: µ=5 against the alternative that it is not at a level of significance
Calculate the net present value of the proposed investment : Calculate the net present value of the proposed investment in the drilling and production operation. What will the internal rate of return on this investment
Investment have on the firm times interest earned ratio : What effect will the loan and the investment have on the firm's times interest earned ratio?
How the hypothesis and the research design relates : A brief description of how the hypothesis and the research design relates to the problem statement
What incentives does each pay system provide for sales force : Sales Compensation, Variable/Fixed Costs, and Ethics Most companies compensate their sales forces with a combination of a fixed salary and a commission.
What is the probability that a randomly chosen page : Let X denote the number of typos on one page and assume that it has a Poisson distribution. What is the probability that a randomly chosen page is defective?
Explain the barriers to energy efficiency : Explain the barriers to energy efficiency that affect the residential and commercial segments of the U.S. economy.
Gas station are thought to be independent of one another : Daily sales at a gas station are thought to be independent of one another with daily mean $5250 and standard deviation $700.
Describe how globalization and technology change have impact : Strategic Management and Strategic Competitiveness. Describe how globalization and technology changes have impacted the corporation you researched.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Does brannin have any recourse against lucy

Lucy fails to pay the rest of the price, and does not pay Brannin for his services. Does Brannin have any recourse against Lucy?

  Detmer holdings ag of zurich switzerland has just

detmer holdings ag of zurich switzerland has just introduced a new fashion watch for which the company is trying to

  Incident response system-place of employment

Why is it necessary for a business to have an Incident Response System in place? Does your place of employment have one? Explain in detail.

  Describe some of the specific tactics

Resistance to change is more likely to succeed if the forces resisting the change are stronger than the forces driving the need for change. Describe some of the specific tactics that resisters would employ to thwart change efforts.

  Collects cash from the buyer''s installment payments

Monforte Inc. began operations in January 2015. For certain of its property sales, Monforte recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Monforte recognizes income when it collects..

  Prepare the statement of financial position

Prepare the Statement of Financial Position for YTP as at 31 December 20X6, incorporating all the necessary adjustments

  Potential tax problem with sale of land

Nall had purchased the land for $62,000. Write a memorandum to the controller of Nall, Inc., explaining the potential tax problem with the sale of the land to Trebor.

  Four flags is a retail department store on january 1 2012

four flags is a retail department store. on january 1 2012 four flags accountants used the following data to develop

  Board of directors come represent interval data

Data on the city from which members of a board of directors come represent interval data. Inferential statistics infer the characteristics of samples.

  For what purposes did the aicpa

For what purposes did the AICPA in 1959 create the Accounting Principles Board?

  A companys current net operating income is 22000 and its

a companys current net operating income is 22000 and its average operating assets are 87000. the companys required rate

  Gaap financial statement purpose

Rubarb farms depreciates its assets at a faster rate for tax purposes than to GAAP financial statement purposes, and invest heavily in municipal bonds. in its first year of operation, the year ended Dec 31, year 1.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd