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According to recent focus sessions, Norton Corporation has a “can’t miss” consumer product on its hands. Sales forecasts indicate either excellent or good results, with Norton’s sales manager assigning a probability of .6 to a good results outcome. The company is now studying various sales compensation plans for the product and has determined the following contribution margin data:  On the basis of this information, which of the following statements is correct?A. Plan 2 should be adopted because it is $10,000 more attractive than Plan 1. B. Plan 1 should be adopted because it is $8,000 more attractive than Plan 2. C. Plan 1 should be adopted because of the sales manager’s higher confidence in good results. D. Either Plan should be adopted, the decision being dependent on the probability of excellent sales results. |