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Fixing compensation for merchandising divisional manager

C&DS6-5, Chapter 6 in "Fundamentals of Financial Accounting". Assume you work as an Accountant in the merchandising division of a large public company that makes and sells athletic clothing. To encourage the merchandising division to earn as much profit on each individual sale as possible, the division manager's pay is based, in part, on the division's gross profit percentage. Include the requirements in the assignment and complete a 500-750 word paper.
Properly cite your references. If you used an electronic source, include the URL. If you used a printed source please include the data to your paper. See written presentation rubric in this syllabus

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Dear student,

The company is engaged in the making and selling of the athletic clothing. The company has manufacturing division which is engaged in the manufacture of athletic clothes and merchandising division which is engaged in the selling of manufactured clothes. The compensation package should be different to the managers of the manufacturing division and the merchandising division. Manufacturing divisional manager should be compensated on the basis of the measures to control the cost and how he is efficient in controlling the cost and reduce the wastage and defectives. On the other hand, the manager of the merchandising division has to be compensated on the basis of the sales made or gross profit earned in the merchandising division.
Job description of the merchandising divisional manager:
The merchandising manager should have the sound knowledge of the quality, the various grades and the rates of different types of the clothes and should have the prior adequate experience in the sale of athletic clothes. He should have high level of judgmental capacity to judge the ...

Solution Summary

The answer contains job description and duties of merchandising divisional manager & factors to be taken into account in deciding compensation package for merchandising divisional manager to motivate him.