You are manager of a department store in Kyoto. Sales are subject to month-tomonth variations, depending on the individual sales-clerk’s efforts. A new salary-plus-bonus plan has been in effect for four months, and you are reviewing a sales performance report. The plan provides for a base salary of ¥50,000 per month, a ¥68,000 bonus each month if the monthly sales quota is met, and an additional commission of 5 percent of all sales over the monthly quota. The quota is set approximately 3 percent above the previous month’s sales to motivate clerks toward increasing sales (in thousands): 

1. Compute the compensation for each sales clerk for each month. 

2. Evaluate the compensation plan. Be specific. What changes would you recommend?

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Salesclerk A Salesclerk B Salesclerk C ¥1,500 Quota ¥4,500 ¥7,500 January Actual 1,500 Quota 1,545 1,500 9,000 1,545 9,270 February Actual 3,000 1,545 3,000 Quota 3,090 March Actual 5,250 1,590 3,090 750 9,000 Quota 5,400 Actual 1,500 775 9,270 April 780 4,050