Question 1

Three types of expense plans that can be used include:

Accepted Answer

A)   unlimited, limited, per diem.
B)   restricted, unrestricted, per diem.
C)   restricted, unrestricted, partial.
D)   full, partial, per diem.
E)   none of the above: there are only 2 types.

Question 2

Benefits are often preferred by salespeople because:

Accepted Answer

A)   they are more liquid than cash.
B)   they offer tax benefits to the salesperson.
C)   they provide more discretionary income.
D)   they are especially made for overseas use.
E)   none of the above.

Question 3

When establishing goals for the compensation plan, a sales manager must consider:

Accepted Answer

A)   competitive compensation packages in the marketplace.
B)   the needs of firm and customers.
C)   motivation considerations of the sales force.
D)   costs of the plan.
E)   all of the above.

Question 4

Which of the following statements about a straight salary compensation plan is true:

Accepted Answer

A)   Straight salary compensation plans are more complex to administer than straight commission compensation plans.
B)   A major limitation of straight salary compensation plans is that financial rewards are not directly tied to any specific aspect of job performance.
C)   Straight salary compensation is more commonly used with experienced salespeople than with newly hired sales recruits.
D)   Straight salary compensation plans are most useful when sales managers want to motivate its sales force to achieve short-run sales volume increases.
E)   It is inappropriate to use straight salary compensation for industries where missionary selling is commonplace.

Question 5

You are the sales manager of a large, multi-product company. Your national sales force is divided into eight regions, though the Mid-Atlantic region is currently understaffed (sales volume there has always been low) . Your salespeople are paid on commission. The economy has entered a period of recession, and even the Administration's economists predict that it will remain so for at least three more quarters. In order to "weather the storm," the best course of action among those presented below is to:

Accepted Answer

A)   withdraw from the Mid-Atlantic region in order to reduce fixed costs.
B)   shift from commission to salary in all regions in order to cut expenses.
C)   raise commission rates on higher margin products in all regions in order to boost sales.
D)   all of the above.
E)   none of the above.

Question 6

It is not clear that offering unlimited opportunities to earn higher pay will always be an effective method for continued salesperson motivation.

Accepted Answer

A) True 
 B)False

Question 7

When the economy and sales are expanding, some firms shift from salary to commission plans to cut expenses and lower fixed costs.

Accepted Answer

A) True 
 B)False

Question 8

Straight salary plans often do not provide strong incentive for extra effort.

Accepted Answer

A) True 
 B)False

Question 9

The size of the bonus payment is entirely arbitrary in many salary-plus-bonus plans.

Accepted Answer

A) True 
 B)False

Question 10

You have decided to change your commission structure to enhance market penetration. You now require the sales force to sell $35,000 worth of product each month to make a commission. Those who sell below $35,000 will not receive commissions. This $35,000 level is called:

Accepted Answer

A)   commission threshold.
B)   wage cap.
C)   progressive incentive plan.
D)   fringe benefit stage.
E)   none of the above.

Question 11

Which of the following would not be a part of a well-designed compensation package?

Accepted Answer

A)   travel expenses
B)   salary
C)   bonuses
D)   commissions
E)   all of the above could be part of a compensation package.

Question 12

You have read a "want ad" in the latest edition of Marketing News. The firm is looking for a Vice President for sales and promotion. The company uses a combination of brokers and independent sales reps. What kind of a compensation program would they most likely to use for their salespeople?

Accepted Answer

A)   straight salary
B)   straight commission
C)   salary plus bonus
D)   commission plus bonus
E)   salary plus commission plus bonus

Question 13

Salary plans are not popular with salespeople because:

Accepted Answer

A)   salaries are predictable.
B)   salaries are stable.
C)   they run the risk of having little or no income.
D)   they do not provide strong incentives for extra effort.
E)   none of the above - salary plans are always popular with salespeople.

Question 14

The expense plan that is cheapest to administer is:

Accepted Answer

A)   unlimited.
B)   per diem.
C)   limited.
D)   fringe benefit.
E)   none of the above.

Question 15

As a sales manager, you liked the advantages that salary plus bonus plans offer yet you were very concerned about some of the following serious problems associated with it:

Accepted Answer

A)   the size of individual payments are set arbitrarily.
B)   bonus payments are too small to have any impact on the activities of salespeople.
C)   payments are received so long after goals are achieved they provide little incentive.
D)   both a and c of the above.
E)   all of the above.

Question 16

Industrial sales reps are often paid with a compensation plan that can be tailored to the incentive needs of a particular firm but also has a fixed salary component. This type of plan is called:

Accepted Answer

A)   gross margin plan.
B)   straight salary.
C)   salary plus commission.
D)   fringe benefit design.

Question 17

Straight commission is a(an) :

Accepted Answer

A)   fixed cost.
B)   variable cost.
C)   semi-fixed cost.
D)   intermediate cost.
E)   material cost.

Question 18

As the Vice President of Sales for a new startup company, you decide to hire and train your own field sales force. You also decide to pay your salespeople with the most common type of compensation plan among companies. This pay plan is the:

Accepted Answer

A)   salary plan.
B)   incentive plan.
C)   combination plan.
D)   straight commission plan.
E)   none of the above.

Question 19

Straight salary compensation is typically used in industries where:

Accepted Answer

A)   Missionary selling is the most common type of sales process used.
B)   Team selling is seldom, if ever, used.
C)   Personal selling is more important to the overall marketing program than other push strategies such as advertising.
D)   A great deal of selling skill is required to close sales.
E)   Few, if any, trade promotions are used.

Question 20

Your customer's buying cycle is approximately 2 years and your reps need to invest significant amounts of time understanding their customers. Your ultimate goal is to control selling expense and provide extra rewards for added results. Based on this information, which salesperson compensation plan would work best?

Accepted Answer

A)   salary only
B)   salary plus monthly commission
C)   salary plus year-end bonus
D)   commission only
E)   commission plus bonus

Exam 12: Compensating Salespeople

Salary plans are not popular with salespeople because:

Correct Answer
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Three types of expense plans that can be used include:

Correct Answer
verified

Straight salary plans often do not provide strong incentive for extra effort.

Correct Answer
verified

Correct Answer
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When the economy and sales are expanding, some firms shift from salary to commission plans to cut expenses and lower fixed costs.

Correct Answer
verified

The expense plan that is cheapest to administer is:

Correct Answer
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As a sales manager, you liked the advantages that salary plus bonus plans offer yet you were very concerned about some of the following serious problems associated with it:

Correct Answer
verified

Which of the following statements about a straight salary compensation plan is true:

Correct Answer
verified

Industrial sales reps are often paid with a compensation plan that can be tailored to the incentive needs of a particular firm but also has a fixed salary component. This type of plan is called:

Correct Answer
verified

Benefits are often preferred by salespeople because:

Correct Answer
verified

You have decided to change your commission structure to enhance market penetration. You now require the sales force to sell $35,000 worth of product each month to make a commission. Those who sell below $35,000 will not receive commissions. This $35,000 level is called:

Correct Answer
verified

When establishing goals for the compensation plan, a sales manager must consider:

Correct Answer
verified

It is not clear that offering unlimited opportunities to earn higher pay will always be an effective method for continued salesperson motivation.

Correct Answer
verified

Straight salary compensation is typically used in industries where:

Correct Answer
verified

Which of the following would not be a part of a well-designed compensation package?

Correct Answer
verified

Straight commission is a(an) :

Correct Answer
verified

As the Vice President of Sales for a new startup company, you decide to hire and train your own field sales force. You also decide to pay your salespeople with the most common type of compensation plan among companies. This pay plan is the:

Correct Answer
verified

Correct Answer
verified

You have read a "want ad" in the latest edition of Marketing News. The firm is looking for a Vice President for sales and promotion. The company uses a combination of brokers and independent sales reps. What kind of a compensation program would they most likely to use for their salespeople?

Correct Answer
verified

The size of the bonus payment is entirely arbitrary in many salary-plus-bonus plans.

Correct Answer
verified

Exam 12: Compensating Salespeople

Salary plans are not popular with salespeople because:

Correct AnswerverifiedShow Answer

Three types of expense plans that can be used include:

Correct AnswerverifiedShow Answer

Straight salary plans often do not provide strong incentive for extra effort.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the economy and sales are expanding, some firms shift from salary to commission plans to cut expenses and lower fixed costs.

Correct AnswerverifiedShow Answer

The expense plan that is cheapest to administer is:

Correct AnswerverifiedShow Answer

As a sales manager, you liked the advantages that salary plus bonus plans offer yet you were very concerned about some of the following serious problems associated with it:

Correct AnswerverifiedShow Answer

Which of the following statements about a straight salary compensation plan is true:

Correct AnswerverifiedShow Answer

Industrial sales reps are often paid with a compensation plan that can be tailored to the incentive needs of a particular firm but also has a fixed salary component. This type of plan is called:

Correct AnswerverifiedShow Answer

Benefits are often preferred by salespeople because:

Correct AnswerverifiedShow Answer

You have decided to change your commission structure to enhance market penetration. You now require the sales force to sell $35,000 worth of product each month to make a commission. Those who sell below $35,000 will not receive commissions. This $35,000 level is called:

Correct AnswerverifiedShow Answer

When establishing goals for the compensation plan, a sales manager must consider:

Correct AnswerverifiedShow Answer

It is not clear that offering unlimited opportunities to earn higher pay will always be an effective method for continued salesperson motivation.

Correct AnswerverifiedShow Answer

Straight salary compensation is typically used in industries where:

Correct AnswerverifiedShow Answer

Which of the following would not be a part of a well-designed compensation package?

Correct AnswerverifiedShow Answer

Straight commission is a(an) :

Correct AnswerverifiedShow Answer

As the Vice President of Sales for a new startup company, you decide to hire and train your own field sales force. You also decide to pay your salespeople with the most common type of compensation plan among companies. This pay plan is the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

You have read a "want ad" in the latest edition of Marketing News. The firm is looking for a Vice President for sales and promotion. The company uses a combination of brokers and independent sales reps. What kind of a compensation program would they most likely to use for their salespeople?

Correct AnswerverifiedShow Answer

The size of the bonus payment is entirely arbitrary in many salary-plus-bonus plans.

Correct AnswerverifiedShow Answer

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