Pipeline Unlimited produces two types of surfboards, the XR7 and the Turbo. The XR7 sells...
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Pipeline Unlimited produces two types of surfboards, the XR7 and the Turbo. The XR7 sells for $100 and generates a contribution margin per unit of $25. The Turbo sells for $150 and earns a contribution margin per unit of $18. The sales force at Pipeline Unlimited is compensated based on sales commissions. They are paid a commission of 10% of sales revenue. What kind of misbehavior would be encouraged by this sales commission structure? If you were the vice president at the sales division, what would you do to maximize the companys profit?
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