A company produces three product lines and a different marketing manager is responsible for each line. Most marketing expenses are specific to each line, but a common sales force sells all three lines. Sales reps are paid by commission, with a different commission for each product line. In this case, in a marketing cost analysis,
A. sales commissions are a variable expense and would not be considered in the contribution-margin approach.
B. the full-cost approach would be easier to do if all sales reps were paid a straight salary.
C. the contribution-margin approach would probably divide personal selling expense based on commission expense for each product line.
D. a full-cost approach would ignore commission expense, since it is not a fixed cost.
E. None of these answers is correct.
Answer: C
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