How can Lisa Braun encourage her salespeople to promote the more profitable model?

ACCOUNTING

Multiple Choice

Braun’s Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply:



Model X Model Y Model Z

Selling price $50 $60 $70

Direct materials 6 6 6

Direct labor ($12 per hour) 12 12 24

Variable support costs ($4 per machine-hour) 4 8 8

Fixed support costs 10 10 10



How can Lisa Braun encourage her salespeople to promote the more profitable model?

a. Put all sales persons on salary

b. Provide higher sales commissions for higher priced items

c. Provide higher sales commissions for items with the greatest contribution margin per constrained resource

d. Both (b) and (c)


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