Extension of 3.10 Refer to part 4 of Problem 3.10.

Compute the point of indifference between a fixed-salary plan and a commission plan. That is, calculate the volume level in units where the profit under each plan would be equal. Above that volume level one plan would be more profitable than the other; below that level the reverse would occur.

Compute the net income or loss under each plan at volume levels of 25,000 units and 50,000 units.

Suppose the target net income is $6,000. How many units must be sold to reach the target under

(a) the commission plan and

(b) the salary plan? lop1