Problem $23-2.$

Tarrell Company coepensues is field sales force ce a commission and year$-$end bonas busic The commission is $20$ percent of standard gross margin $($planned selling price less standed cost of goods sold on a full absorption basis$)$ coetingest on collection of the w$.$w$.$ tomers" credit is approved by the compay y credit department. Price concessions are gretiod on occasion by top sales management, but sales com$-$ivions are not reduced by the discoure. A year$-$end bonus of $15$ percent of coen$-$ivices carned is paid to salespersoes who equil ar eveeed their annual sales target. The annual sales turget is usually established by applying approximately a $ percent increase to the prior year'ls sales.

Required:

a$.$ What features of this compensation plan would seem to be effective in mothating the sales force to accompliab compuny goals of higher profiss and reforn on investment? Explain aty.

What features of this eompensation ples would seem to be courcerfoctive tainstivating the sales force to accoepliab the compuny goals of higher profits and return on investment? Explain w$/$y