Clements Cookers are considering a plan to increase their current profit. By employing an additional salesman they feel that sales volume would increase by 10%. The selling price (8000) and production cost per unit (3000) of their product would stay the same but travelling/subsistence expenses and salaries would increase by 5%. In addition, the new employee would be sent on a week's induction training at a cost of 40,000. This training would be repeated each year.

The following extracts are relevant from this year's budgeted figures, before implementing the changes.

sales revenue (10,000 cookers @ 8000 per unit) 80,000

sales expenditure:

salaries 5,000

travel/subsistence 2,000

Marketing 10,000

rent/rates of sales offices 1,000

Required:

Should Clements Cookers employ the additional salesman?