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Sales commission is a variable cost because the amount of the account is subject to variation.
Think about it:
A used car salesman is paid a commission say of $500 for every car he sells for the month of October.
If he sells only 2 cars, then the sales commission is $1000,
If he sells a whopping 12 cars, then the sales commission is $6000!!
Notice the variation in commission??
This is why it is a variable cost - because it is not a fixed cost, which you know regardless of what happens during the period.!
What else can I help you with?
Is sales commissions a fixed or variable cost?
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
What types of commissions do corporate sales jobs pay?
Corporate sales jobs pay 2 types of commission. These are straight which is based off of the percentage of sales and variable commissions pay differently upon reaching targets.
What is true variable cost?
True variable cost refers to expenses that change directly with the level of production or sales volume. Unlike fixed costs, which remain constant regardless of output, true variable costs fluctuate in direct proportion to the amount produced or sold, such as raw materials, direct labor, and sales commissions. Understanding true variable costs is crucial for businesses to accurately assess profitability and make informed pricing and production decisions.
Is sales on account a variable cost?
Sales aren't any sort of cost. They are the opposite of costs.
Are sales commissions a direct labor cost?
is salesmen commission apart of direct labor
Is sales commissions a fixed or variable cost?
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
Is commissions a fixed or variable costs?
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
How can you determine sales when variable cost is given and sale ratio?
If Variable cost and sales ratio is provided then by using mathematical equation approach mixing figures can be found by using provided figures. Sales = Variable cost + Sales percentage of (Variable cost)
What types of commissions do corporate sales jobs pay?
Corporate sales jobs pay 2 types of commission. These are straight which is based off of the percentage of sales and variable commissions pay differently upon reaching targets.
How do you calculate the Contribution margin ratio?
sales-variable cost= contribution
What is true variable cost?
True variable cost refers to expenses that change directly with the level of production or sales volume. Unlike fixed costs, which remain constant regardless of output, true variable costs fluctuate in direct proportion to the amount produced or sold, such as raw materials, direct labor, and sales commissions. Understanding true variable costs is crucial for businesses to accurately assess profitability and make informed pricing and production decisions.
Are sales commissions classified as period costs?
They are classified as a selling cost or nonmanufactoring cost. They are classified as a selling cost or nonmanufactoring cost.
Is sales on account a variable cost?
Sales aren't any sort of cost. They are the opposite of costs.
Are sales commissions a direct labor cost?
is salesmen commission apart of direct labor
The difference between sales price per unit and variable cost per unit is the?
The sales price includes variable cost, the cost of the unit and the markup. Sales price is the rate customers pay for the item.
Is sales promotion cost a variable cost?
If it varies with the level of production then it is variable cost otherwise it is fixed cost.
How do you calculate break even when you only have total sales total variable cost and total fixed cost no unit selling quantity given eg sales 500000 fixed cost 160000 and variable cost 350000?
You cannot. Sales and variable costs must be functions of the units (quantities) sold and produced.
