ACcompany produces and sells a product with the following characteristics:

	Per Unit
Selling price	$	242
Variable expenses		55
Contribution margin	$	187

The AC14905 company is currently selling 8,200 units per month. Fixed expenses are $878,000 per month.

The sales manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $29 per unit. In exchange, the sales staff would accept a decrease in their salaries of $63,000 per month. (This is the company's savings for the entire sales staff.)

The manager predicts that introducing this sales incentive would increase monthly unit sales by 22%. What would be the overall effect on AC14905 company's monthly net operating income of this change?

Multiple Choice

• increase of $74,160

• increase of $145,800

• increase of $207,520

• increase of $110,232