Estimating fixed cost of managing and paying salaries


Assignment:

A furniture manufacturer is currently using manufacturer’s representatives to sell its line of living room furniture. These representatives receive an 8 percent commission. The company is considering hiring its own salespeople and has estimated that the fixed cost of managing and paying their salaries would be $1 million annually. The salespeople would also receive a 4 percent commission on sales. The company has sales of $25 million, and sales are expected to grow by 15 percent next year. Would you recommend that the company switch to its own salesforce? Why or why not?

Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.

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Marketing Management: Estimating fixed cost of managing and paying salaries
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