1.
Explain the term sales mix.
2 a.
Explain Plan A comparing to current compensation to achieve management’s objective of an increased presence in the marketplace.
2 b.
Explain if the salespeople be promoting the product that one would logically expect by comparing the Plan A to the current compensation.
2 c.
Explain whether the sales force is likely to be satisfied with the results of Plan A and give reason.
2 d.
Explain if Mr. L is likely to be satisfied with the resulting impact of Plan A on company profitability. Give reason.
3 a.
Comment on the results by comparing Plan A and Plan B with respect to total units sold and sales mix.
3 b.
Show calculations in comparison with flat salaries, if Plan B is more attractive to the sales force and to the company.
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Managerial Accounting: Creating Value in a Dynamic Business Environment
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