Your client is a manufacturer of handheld tools that employs a sales force to market the tools to retail hardware stores. You plan to use substantive analytical procedures to gather persuasive evidence about the reasonableness of commissions expense. The visualization titled “Average Commission Rate per Customer” has sales and commissions expense data. You can determine whether the relationship between commissions and sales makes sense. If it does, that suggests that commissions expense is fairly stated.

The commission policy of the client is as follows:
For sales greater than $75,000, commission is 3.75%
For sales greater than $50,000, but less than $75,000, commission is 2.5%
For sales greater than $25,000, but less than $50,000, commission is 1.25%
For sales less than $25,000, commission is 0.5%

You can open the Tableau file in this problem statement with Tableau Desktop software. If you do not have a version of Tableau Desktop, you can open the file with Tableau Reader. Tableau Reader is a free download that allows you to open visualizations built with Tableau Desktop. To find a free download of Tableau Reader on the Tableau website, search for “Tableau Reader” in your internet browser, or click here.

Using the visualization titled “Sales before Tax and Commissions per Salesperson,” which of the following is most likely true:

A. Commissions vary with order size, so the relationship of some commissions higher and some lower than sales on a dual axis makes sense. Commissions expense appears fairly stated.

B. Sales should be much higher than commissions, so there is a material misstatement in the data.

C. We don’t have enough information to provide persuasive evidence with respect to commissions expense.

D. Sales commissions and Sales should be identical in height. There is a material misstatement in the data.

Transcribed Image Text:

Measure Names Sales Before Tax and Commissions per Salesperson Commission 20K I Sales before tax 1300K 1.60% $1,198,759 18K 1200K 1100K 1.49% 1.41% 16K $1,022,440 1.42% $1,029,339 1.66% 1000K $971,254 1.43% $937,132 $900,395 1.25% 14K Average Sales per Salesnerson $880 698 900K $864 46Åverage commission per sales person $12,603 1.24% 1.46% $785,287 12K 800K $722,404 1.51% 700K $677,692 10K $19,192 1.05% 600K $578,504 $15,587 $15,238 8K 500K $14,534 $13,823 $12,850 400K 6K $10,784 $10,522 $10,238 $9,768 300K 4K 200K $6,097 2K 100K OK OK A. Lopez B. Wood C. Sandoval D. Russell E. Carr F. Hughes G. Liu H. Park J. Morton S. Warren M. Nicholls Sales before tax Commission Measure Names Sales Before Tax and Commissions per Salesperson Commission 20K I Sales before tax 1300K 1.60% $1,198,759 18K 1200K 1100K 1.49% 1.41% 16K $1,022,440 1.42% $1,029,339 1.66% 1000K $971,254 1.43% $937,132 $900,395 1.25% 14K Average Sales per Salesnerson $880 698 900K $864 46Åverage commission per sales person $12,603 1.24% 1.46% $785,287 12K 800K $722,404 1.51% 700K $677,692 10K $19,192 1.05% 600K $578,504 $15,587 $15,238 8K 500K $14,534 $13,823 $12,850 400K 6K $10,784 $10,522 $10,238 $9,768 300K 4K 200K $6,097 2K 100K OK OK A. Lopez B. Wood C. Sandoval D. Russell E. Carr F. Hughes G. Liu H. Park J. Morton S. Warren M. Nicholls Sales before tax Commission

Answer rating: 100% (QA)

ANSWER We dnt hve enugh infrmtin t rvide ersusive evidene with reset t mmissins exense Theres ls n u... View the full answer