Question
Data concerning Wislocki Corporation's single product appear below: per unit selling price $190 Percent of sales 100% Variable expenses per unit 38 Percent of sales
Data concerning Wislocki Corporation's single product appear below: per unit selling price $190 Percent of sales 100% Variable expenses per unit 38 Percent of sales 20% Contribution margin per unit $152 percent of sales 80%
Fixed expenses are $1,039,000 per month. The company is currently selling 9800 units per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $13 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $107,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 360 units. What should be the overall effect on the company's monthly net operating income of this change?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started