Essay : How would you estimate the additional dollar cost of each additional salesperson?

Samuelson and Marks, Chapter 2, Discussion Question, p. 43.

As vice president of sales for a rapidly growing company, you are grappling with the question of expanding the size of your direct sales force (from its current level of 60 national salespeople). You are considering hiring from 5 to 10 additional personnel.

How would you estimate the additional dollar cost of each additional salesperson? Based on your company’s past sales experience, how would you estimate the expected net revenue generated by an additional salesperson? (Be specific about the information you might use to derive this estimate.) How would you use these cost and revenue estimates to determine whether a sales force increase (or possibly a decrease) is warranted?
Please use the below reference for your primary reference.
Book Title: Managerial Economics, 8th edition
Author(s): William F. Samuelson & Stephen G. Marks
Publisher: John Wiley & Sons, Inc
ISBN: 978-1-118-80894-8

SAMPLE SOLUTION

Estimating the additional dollar cost of each additional salesperson
In order to obtain the additional dollar cost of engaging an extra sales person, I would take the change in dollar cost and divide it by the quantitative value differences of the sales personnel. Essentially, the change in the cost of the cumulative sales people is equal to the difference between the costs of the personnel after adding more workers in comparison with the original price prior to the addition of the extra sales people. Once the difference has been determined, you then take that value and divide it by the total number of employees brought on board as …
Estimating the Expected Net Revenue Generated By an Additional Salesperson
The net revenue can be obtained by subtracting the total costs from the total revenue. Various approaches can be used to estimate any given personnel’s expected net revenue. For..