The company wants to spend 8% of sales on the sales force, the cost of supporting a salesperson is estimated at approximately $80,000 per person, and 20% of the sales force budget is for management and other costs. Using the percent of sales method, calculate the sales force budget, if sales are forecasted to be $3.2 million.

Question

Quizplus · Accepted Answer

The sales force budget is 8% of $3.2 million, which is $256,000. After accounting for 20% management and other costs, the budget for the sales force is $256,000 - ($256,000 * 20%) = $204,800.

The Company Wants to Spend 8% of Sales on the Sales