An insurance company pays its employees a commission of 6 percent on each sale. What is the proper classification of the cost of sales commissions?

Name: An insurance company pays its employees a commission of 6 percent on each sale. What is the proper classification of the cost of sales commissions?
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Question

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Sales commissions are paid as a percentage of each sale, so the amount of the commission expense will vary alongside the level of sales. Therefore, sales commissions are classified as a variable cost.

An Insurance Company Pays Its Employees a Commission of 6