Question 1

Which of the following statements about straight commission compensation plan is true?

Accepted Answer

A)   Straight commission compensation plans are inherently unfair.
B)   Straight commission compensation plans are especially advantageous for companies that are short of working capital.
C)   Top executives and other financial executives know that commission compensation plans are anxiety producing and often try to avoid from implementing such a plan.
D)   Salespeople on a straight commission plan make more numbers of cold calls than salespeople on a straight salary plan.
E)   Straight commission compensation is most appropriate for companies that require its sales force to engage in missionary selling.F) B) and C)
G) A) and E)

Question 2

Many small firms use _______plans to get started and then shift to__________ plans when revenues grow.

Accepted Answer

A)   combination, straight commission
B)   salary, combination
C)   salary, commission
D)   commission, salary
E)   none of the aboveF) A) and D)
G) A) and B)

Question 3

Travel and entertainment costs are a relatively insignificant portion of a salesperson's compensation package.

Accepted Answer

A) True 
 B)False

Question 4

A valid objective in creating commission-based pay programs is to devise a system that encourages salespeople to sell items that maximize profits of the firm

Accepted Answer

A) True 
 B)False

Question 5

The net result of setting limits on sales expenses is that salespeople spend their valuable time juggling expenses from one category to another or from one time period to another to make sure they cover their costs.

Accepted Answer

A) True 
 B)False

Question 6

You were given the mandate by your boss to change the compensation plan so that the total salesperson compensation (salary plus commission)  is lowered. You think you have finally selected a compensation method and wage level that meets your boss's requirements. According to your text, what would you do next?

Accepted Answer

A)   Implement the plan immediately because it fits the requirement of lowering overall salesperson compensation.
B)   Get salesperson feedback about your ideas.
C)   Check to see how the salespeople would fare under the new plan by using sales figures from the previous year and calculating expecting compensation.
D)   Make sure that the accounting department can implement the new plan.
E)   Tell the salespeople that they have been overpaid and now you are bringing them back to reality.F) B) and C)
G) A) and E)

Question 7

To establish the "best" wage level for salespeople, managers have only two options: pay a premium to the marketplace, or pay less than the going rate.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are possible benefits to salespeople except:

Accepted Answer

A)   automobile.
B)   food allowance.
C)   lodging.
D)   bail money for salespeople at conferences, "just in case".
E)   tickets to theaters and sporting events.F) None of the above
G) B) and E)

Question 9

Typical benefits include hospitalization, insurance, and pension plans.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following accurately describe per diem expense plans?

Accepted Answer

A)   a floating rate of reimbursement is used depending on the situation.
B)   expenses come from commissions.
C)   a fixed dollar amount is paid for each day or week in the field.
D)   a ceiling amount is set for payment in all circumstances.
E)   none of the above.F) A) and C)
G) C) and D)

Question 11

Salesperson compensation has been an issued marked by trial and error to discover the right formula.

Accepted Answer

A) True 
 B)False

Question 12

If a salesperson receives a set amount of money for mileage, meals, and hotel, what type of expense plan is she receiving?

Accepted Answer

A)   an unlimited plan
B)   a per diem plan
C)   a limited plan
D)   a bonus plan
E)   none of the aboveF) C) and D)
G) B) and C)

Question 13

Selling situations that require salespeople to perform special services for customers are more likely to be performed when salespeople are on salary.

Accepted Answer

A) True 
 B)False

Question 14

Commission programs tend to be more common:

Accepted Answer

A)   when a minimum of after-sale service is needed.
B)   when team selling is important.
C)   when a strong incentive is needed.
D)   when products are presold through advertising.
E)   both a and c of the above.F) A) and D)
G) A) and E)

Question 15

It is usually easy to design pay plans that fully meet the goals and needs of the firm, customers, and salespeople.

Accepted Answer

A) True 
 B)False

Question 16

In your job analysis of the salesperson's activities, you discover that a significant level of activity of a successful salesperson includes taking orders for inventory replenishment, equipment installation and maintenance, and shelf-management programs. Based on this analysis you know that a larger percentage of the salesperson's pay should be _____________ as compared to ______________ for the best results.

Accepted Answer

A)   incentive, salary
B)   commission, bonus
C)   salary, commission
D)   commission, salary
E)   none of the aboveF) A) and B)
G) A) and C)

Question 17

Advantages of commission includes all of the following except:

Accepted Answer

A)   fostering independent action.
B)   providing the maximum possible incentive.
C)   often paying relatively high wages.
D)   making selling costs proportional to the amount of goods sold.
E)   making possible greater control by sales managers.F) A) and C)
G) C) and E)

Question 18

Real estate and life insurance firms typically use a sales force compensation package based on salary plus commission plus bonus.

Accepted Answer

A) True 
 B)False

Question 19

According to your text, which benefit is offered by the greatest percentage of companies?

Accepted Answer

A)   hospital
B)   dental insurance
C)   pension plan
D)   profit sharing
E)   educational assistanceF) A) and D)
G) All of the above

Question 20

Which of the following plans allows the salesperson and company to share the same pool of money so that both are interested in maximizing the pool?

Accepted Answer

A)   combination plans
B)   gross margin commissions
C)   group bonus plans
D)   expense accounts
E)   social security plansF) None of the above
G) C) and D)

Exam 12: Compensating Salespeople

Many small firms use _plans to get started and then shift to____ plans when revenues grow.

Correct Answer
verified

Advantages of commission includes all of the following except:

Correct Answer
verified

To establish the "best" wage level for salespeople, managers have only two options: pay a premium to the marketplace, or pay less than the going rate.

Correct Answer
verified

It is usually easy to design pay plans that fully meet the goals and needs of the firm, customers, and salespeople.

Correct Answer
verified

The net result of setting limits on sales expenses is that salespeople spend their valuable time juggling expenses from one category to another or from one time period to another to make sure they cover their costs.

Correct Answer
verified

According to your text, which benefit is offered by the greatest percentage of companies?

Correct Answer
verified

Which of the following statements about straight commission compensation plan is true?

Correct Answer
verified

Correct Answer
verified

Travel and entertainment costs are a relatively insignificant portion of a salesperson's compensation package.

Correct Answer
verified

Typical benefits include hospitalization, insurance, and pension plans.

Correct Answer
verified

Which of the following plans allows the salesperson and company to share the same pool of money so that both are interested in maximizing the pool?

Correct Answer
verified

Real estate and life insurance firms typically use a sales force compensation package based on salary plus commission plus bonus.

Correct Answer
verified

Which of the following accurately describe per diem expense plans?

Correct Answer
verified

A valid objective in creating commission-based pay programs is to devise a system that encourages salespeople to sell items that maximize profits of the firm

Correct Answer
verified

Selling situations that require salespeople to perform special services for customers are more likely to be performed when salespeople are on salary.

Correct Answer
verified

All of the following are possible benefits to salespeople except:

Correct Answer
verified

If a salesperson receives a set amount of money for mileage, meals, and hotel, what type of expense plan is she receiving?

Correct Answer
verified

Commission programs tend to be more common:

Correct Answer
verified

Correct Answer
verified

Salesperson compensation has been an issued marked by trial and error to discover the right formula.

Correct Answer
verified

Exam 12: Compensating Salespeople

Many small firms use _______plans to get started and then shift to__________ plans when revenues grow.

Correct AnswerverifiedShow Answer

Advantages of commission includes all of the following except:

Correct AnswerverifiedShow Answer

To establish the "best" wage level for salespeople, managers have only two options: pay a premium to the marketplace, or pay less than the going rate.

Correct AnswerverifiedShow Answer

It is usually easy to design pay plans that fully meet the goals and needs of the firm, customers, and salespeople.

Correct AnswerverifiedShow Answer

The net result of setting limits on sales expenses is that salespeople spend their valuable time juggling expenses from one category to another or from one time period to another to make sure they cover their costs.

Correct AnswerverifiedShow Answer

According to your text, which benefit is offered by the greatest percentage of companies?

Correct AnswerverifiedShow Answer

Which of the following statements about straight commission compensation plan is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Travel and entertainment costs are a relatively insignificant portion of a salesperson's compensation package.

Correct AnswerverifiedShow Answer

Typical benefits include hospitalization, insurance, and pension plans.

Correct AnswerverifiedShow Answer

Which of the following plans allows the salesperson and company to share the same pool of money so that both are interested in maximizing the pool?

Correct AnswerverifiedShow Answer

Real estate and life insurance firms typically use a sales force compensation package based on salary plus commission plus bonus.

Correct AnswerverifiedShow Answer

Which of the following accurately describe per diem expense plans?

Correct AnswerverifiedShow Answer

A valid objective in creating commission-based pay programs is to devise a system that encourages salespeople to sell items that maximize profits of the firm

Correct AnswerverifiedShow Answer

Selling situations that require salespeople to perform special services for customers are more likely to be performed when salespeople are on salary.

Correct AnswerverifiedShow Answer

All of the following are possible benefits to salespeople except:

Correct AnswerverifiedShow Answer

If a salesperson receives a set amount of money for mileage, meals, and hotel, what type of expense plan is she receiving?

Correct AnswerverifiedShow Answer

Commission programs tend to be more common:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Salesperson compensation has been an issued marked by trial and error to discover the right formula.

Correct AnswerverifiedShow Answer

Many small firms use _plans to get started and then shift to____ plans when revenues grow.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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