Commissions paid to salespersons are a variable selling expense

Question

Quizplus · Accepted Answer

Commissions paid to salespersons are based on the level of sales they make and thus, are a variable expense.

Examples of variable costs: 
- Cost of raw materials needed for production
- Shipping and handling costs 
- Sales commissions 
- Cost of packaging

Examples of fixed costs: 
- Rent or mortgage payments 
- Salaries of management and administrative staff 
- Property taxes 
- Insurance premiums

Commissions Paid to Salespersons Are a Variable Selling Expense