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Managers of Tom Brown Distributors $70,596 per year and earn a 3% sales ommission. are evaluating the compensation system for the company's sales personnel. Currently,
Managers of Tom Brown Distributors $70,596 per year and earn a 3% sales ommission. are evaluating the compensation system for the company's sales personnel. Currently, the two salespeople have a combined salary of The company is considering two alternatives to the current compensation system. commission to 5%. The second alternative is to eliminate the salaries and pay a 12% sales commission. Sales projections under each of the compensation systems are as follows Current system Salary and 5% commission $ 1,168,016 $1,056,508 $1,264,444 (a) Write the cost equations for the current compensation system and both alternative If the Current system salary and 5% commission- 12% commission (b Given Tom Brown's sales projections, and assuming that the cost of goods sold is equal to 3 % or sales, which pay system would be the most pertable on. for the x sales) + $ x sales) + $ x sales) company? Ignore all other costs. (Round unit cost to 2 declrnal places, e.. .09 and inal answers to O deelami plate-s,72s.)
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