Answered step by step
Verified Expert Solution
Link Copied!

Question

00
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

image text in transcribedimage text in transcribed

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

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

10th Edition

324300980, 978-0324300987

Students also viewed these Accounting questions