The sales manager is deciding between two possible compensation structures for sales staff. Under one plan, salespeople would receive a base compensation of $80,000 per year plus a 1% commission on all sales to their customers. Under the other plan, the base compensation would drop to $40,000 per year, but the commission rate would increase to 5%. What are the advantages and disadvantages, to the company of both plans? As the accounting manager, would you have a preference? Why or why not? (answer in text form please (without image), Note: .Every entry should have narration please)
The sales manager is deciding between two possible compensation structures for sales staff. Under one plan, salespeople would receive a base compensation of $80,000 per year plus a 1% commission on all sales to their customers. Under the other plan, the base compensation would drop to $40,000 per year, but the commission rate would increase to 5%. What are the advantages and disadvantages, to the company of both plans? As the accounting manager, would you have a preference? Why or why not? (answer in text form please (without image), Note: .Every entry should have narration please)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The sales manager is deciding between two possible compensation structures for sales staff. Under one plan, salespeople would receive a base compensation of $80,000 per year plus a 1% commission on all sales to their customers. Under the other plan, the base compensation would drop to $40,000 per year, but the commission rate would increase to 5%. What are the advantages and disadvantages, to the company of both plans? As the
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