Answered step by step
Verified Expert Solution
Question
1 Approved Answer
2 00:39:25 Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns
2 00:39:25 Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 8% commission on the units they sell for $100 each, plus a fixed salary of $40,700 per person. Glade hopes that by increasing commissions to 13% and decreasing each salesperson's salary to $20,600, sales will increase because salespeople will be more motivated. Currently, sales are 14,000 units. Glade's other fixed costs, NOT including the salespeople's salaries, total $583,000. Glade's other variable costs, NOT including commissions, total $19 per unit. a. What is the current profit? Current Pro b. What is the current break-even point in units? (Round your answer to the nearest whole number.) Break Even Point units e. What would the break-even point in units be if commissions are increased and salaries decreased? (Round your answer to the nearest whole number.) vest Even Point unt 2 00:39.12 c. What would the break-even point in units be if commissions are increased and salaries decreased? (Round your answer to the nearest whole number.) Break Even Point units d. If sales increase by 7,000 units, what will profit be under the new plan? Prolt Under the New Plans e. At what sales level would Glade be indifferent between the lower-commission plan and the higher-commission plan? Pont of Indiffelence units
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started