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Data concerning Curtis Corporation's single product appear below: Per Unit % of Sales Selling price $ 1 3 5 . 0 0 per unit, 1
Data concerning Curtis Corporation's single product appear below:
Per Unit of Sales
Selling price $ per unit, of sales
Variable expenses $ per unit, of sales
Contribution margin $ per unit, of sales
Fixed expenses are $ per month. The company is currently selling units per month.
Required:
The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $ per unit. In exchange,
the sales staff would accept an overall decrease in their salaries of $ per month. The marketing manager predicts that introducing this sales incentive would increase monthly
sales by units. Show your work!
Detail from above paragraph
Fixed expenses are per month are: $
Current monthly units sales are:
Marketing manager proposal:
Increase in variable costs sales commission: $
Decrease in sales salaries: $
Target impact of proposal:
Unit sales change
Required:
a What is the new contribution margin per unit?
b What is the new sales volume?
c What is the new total contribution margin?
d What is the current total contribution margin?
e What is the change in total contribution margin?
f What should be the overall effect on the company's monthly net operating income of this change?
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