6-24 Sales Incentives (CMA) The Parsons Co. compensates its field sales force on a commission and year-end bonus basis. The commission is 20 percent of budgeted gross margin (planned selling price less cost of goods sold) contin- gent upon collection of the account. Customer's credit is approved by the company's credit department. Price concessions are granted on occasion by the top sales management, but sales commissions are not reduced by the dis- count. A year-end bonus of 15 percent of commissions earned is paid to sales- men who equal or exceed their annual sales target. The annual sales target is usually established by applying approximately a 5 percent increase to the prior year's sales.