Contribution margin(THB)/month Commission rate To threshold (0 30,000)01st Commission RateFrom threshold to target (30,000 37,353)542nd Commission RateAbove 100Y Commission Rate for Contribution Margin above Target (Y) The contribution margin above the target amount represents the profit to the company beyond the cost of capital. This profit can be shared with the sales representatives by any amount that management deems appropriate. Thus Biomed set a commission rate at 60 per cent for a contribution margin that exceeds the target amount. They believed that this rate would highly motivate sales representatives, align their interests with the company and increase their loyalty to the company. In the plan, this was to be stated as Sales representatives who cover their part of Biomeds fixed overhead costs, that is those who reach at least THB30,000 contribution margin, will be eligible to receive commissions. From the threshold to the target (THB37,353, which is the figure needed to cover minimal Biomed profitability), sales representatives will receive 54 per cent of the
Contribution margin(THB)/month Commission rate To threshold (0 30,000)01st Commission RateFrom threshold to target (30,000 37,353)542nd Commission RateAbove 100Y Commission Rate for Contribution Margin above Target (Y) The contribution margin above the target amount represents the profit to the company beyond the cost of capital. This profit can be shared with the sales representatives by any amount that management deems appropriate. Thus Biomed set a commission rate at 60 per cent for a contribution margin that exceeds the target amount. They believed that this rate would highly motivate sales representatives, align their interests with the company and increase their loyalty to the company. In the plan, this was to be stated as Sales representatives who cover their part of Biomeds fixed overhead costs, that is those who reach at least THB30,000 contribution margin, will be eligible to receive commissions. From the threshold to the target (THB37,353, which is the figure needed to cover minimal Biomed profitability), sales representatives will receive 54 per cent of the