3.47CVP Analysis

Carol Mauldin, owner of Mauldin Mercantile Exchange, is considering changing to a sales commission pay scale for her employees. Currently, her 20 salespeople are each paid a flat salary of $45,000. She believes that by introducing a sales commission on certain products she can increase sales volume and operating income. Carol has provided you with two data files: all sales transactions from the past year and a product list that contains sales price and variable cost for each item sold by the company.

Required(Evaluate each scenario independently and round dollar calculations to 2 decimal places.)

1. Calculate Mauldin's current contribution margin using the sales data from the most current year. You will find Excel's VLOOKUP function helpful in calculating the contribution margin of each sales transaction.

I was given data set from the professor with sales volume, sales price and variable cost for each product. In order to calculate the total contribution margin, do I need to calculate each product contribution margin first?