On which of the following are profit-based quotas most likely to be based?

Question

Quizplus · Accepted Answer

Profit-based quotas are typically based on the gross margin, which is the profit earned on sales after subtracting the cost of goods sold. This allows companies to ensure that they are generating enough profit from their sales to cover their expenses and make a profit. Net income and retained earnings are also measures of profitability, but they may be influenced by factors such as taxes and other expenses beyond the cost of goods sold. Accounts receivable and accounts payable are typically related to cash flow and not directly linked to profit. Therefore, C) gross margin is the best choice for profit-based quotas.

On Which of the Following Are Profit-Based Quotas Most Likely