Milner Manufacturing had a bad year in 2010. For the first time in its history it operated
Question:
Milner Manufacturing had a bad year in 2010. For the first time in its history it operated at a loss. The company's income statement showed the following results from selling 60,000 units of product: Net sales \(\$ 1,500,000\); total costs and expenses \(\$ 1,660,000\); and net loss \(\$ 160,000\). Costs and expenses consisted of the following.
Management is considering the following independent alternatives for 2011.
1. Increase unit selling price \(20 \%\) with no change in costs, expenses, and sales volume.
2. Change the compensation of salespersons from fixed annual salaries totaling \(\$ 200,000\) to total salaries of \(\$ 30,000\) plus a \(6 \%\) commission on net sales.
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel