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4. Kingsly is studying the addition of a new product that would have an expected selling price of P200 and expected variable cost of P100.

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4. Kingsly is studying the addition of a new product that would have an expected selling price of P200 and expected variable cost of P100. Anticipated demand is 10,000 units. A new salesperson must be hired because the company's current sales force is working at capacity. Two compensation plans are under consideration: Plan A: An annual salary of P42,000 plus 10% commission based on gross sales dollars Plan B: An annual salary of P150,000 and no commission Calculate the contribution margin and net income of the two plans at 10,000 units. 5. Based on no 4, Compute the operating leverage factor of the two plans at 10,000 units. Which of the two plans is more highly leveraged

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