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ASAP ABT Company produces and sells a single product. The company's revenues and costs data for the most recent month are given below: Sales (7,000
ASAP
ABT Company produces and sells a single product. The company's revenues and costs data for the most recent month are given below: Sales (7,000 units at $40 per unit) Direct materials $280,000 56,000 Direct labor Variable overhead 70,000 14,000 Fixed overhead 30,000 Variable selling 28,000 Fixed selling 42,000 Required: a) Compute the company's margin of safety(percentage b) If sales are increased by 30%, net operating income will increase by what percentage? a) What dollar sales must the company achieve in order to earn a net income of $50,000 per month? Assume 20% tax rate. c) The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $3 per unit. In exchange, the sales staff would accept a decrease in their salaries of $16,000 per month The marketing manager predicts that introducing this sales incentive would increase monthly sales by 10%. What should the overall effect on the company's monthly net operating income of this changeStep by Step Solution
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