Question
Q 2: Huzaifas Toys produces lucrative toys for kids. Sales personnel are paid a substantial commission on each unit of toys sold plus small basic
Q 2: Huzaifas Toys produces lucrative toys for kids. Sales personnel are paid a substantial commission on each unit of toys sold plus small basic salary, in order to encourage them to be aggressive in their sales efforts.
|
| PER UNIT | Monthly Fixed Expenses: |
|
| Selling price | $40 |
|
|
| Variable costs: |
| Advertising | $40,000 |
| Material costs | $17 | Rent | $25,000 |
| Sales commission | $5.5 | Salaries | $130,000 |
Required:
- The management is planning to give sales commission based on sales revenue only, not cm per unit, suppose the company has 2 different products and both of them have different price ,vc and cm. Will this decision be wise? Comment on the decision. [ 3 Marks ]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing and Assurance Services An Applied Approach
Authors: Iris Stuart
1st edition
73404004, 978-0073404004
