Structuring Sales Commissions Questar Electronics, a producer of a wide range of consumer products, is facing increasing competitive pressures from foreign producers. In response, Questar is...

Structuring Sales Commissions Questar Electronics, a producer of a wide range of consumer products, is facing increasing competitive pressures from foreign producers. In response, Questar is reexamining its overall management control system, including the way the company compensates members of its sales force, who currently earn a 10% commission on sales. Below are highly condensed data for two representative products that Questar sells:

Required 1. What is the contribution margin for each product? 2. Which of the company’s products will likely be more aggressively promoted by the company’s salespeople? Why? 3. Can you suggest an alternative incentive plan, one that would better align employee and corporate interests (i.e., one that would motivate more goal-congruent behavior)?