Question

B Squared Inc. manufactures and sells awnings all over the southeastern United States. Each state has a sales representative who is paid on commissions. Each salesperson is responsible for checking the credit of customers as part of the sales process. Buddy has been the top salesman for the past 5 years in a row. You have been hired as the new sales manager and after meeting with your sales representatives, there are some questions being raised as to why Buddy is the top salesperson and the legitimacy of some of the sales being reported. What information would you request from the accounting department to help confirm or negate these accusations? Please provide your response as a reply to this post.

Answer 1

Answer:

Total sales, selling costs, sales returns

, and uncollectible accounts  to compute and compare relevant ratios.

Explanation:

Since my focus is only on Buddy now, the relevant information I will need as the new sales manager from the accounting department that would assist me in confirming or negating the accusations would be the ones on the company and individual sales representative will be total sales, selling costs, sales returns, and uncollectible accounts.

I would then pay more attention to uncollectible accounts, and then calculate the ratio of sales returns to total sales (and the percentage of this by multiplying it by 100). The aim is to assess if there is any significance difference between the company's number and Buddy's numbers. A comparison of these ratios will then be made with those of other sales reps who have recorded high performance in order to confirm or negate the accusations.