Falcon Enterprises, Inc.

Answer the following questions. $($It is okay to cut and paste the questions$)$:

Assume that each rep sells equally $($$$20$m revenue $/10$ reps $=$ $$2$m sales per rep$).$

$1.$ Given the data provided in the case, what is the margin $($revenue$-$cost of goods sold$)$ for each item they sell? $($show your work$)$

$2.$ Based on the data in #$1,$ how many vacuum cleaners do they need to sell to hit the margin of just $1$ extractor? $($show your work$)$

$3.$ Why does management think they need a new compensation plan?

$4.$ What does the average salesperson make in the existing plan? $($show your work$)$

$5.$ What is the company's total gross margin under the existing plan? $($show your work$)$

$6.$ Make a specific recommendation for a new, better compensation plan for the sales force?

$7.$ What does the average salesperson make in your new plan? $($show your work$)$

$8.$ What is the company's total gross margin in your new plan? $($show your work$)$