Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Data concerning Wislocki Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 160 100 % Variable expenses 40 25 % Contribution

Data concerning Wislocki Corporation's single product appear below:

Per Unit Percent of Sales
Selling price $ 160 100 %
Variable expenses 40 25 %
Contribution margin $ 120 75 %

Fixed expenses are $1,041,000 per month. The company is currently selling 9,600 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 $13 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $105,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change?

Question: change in net operating income = ?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A One Year Accounting Course

Authors: Trevor Gambling

21st Edition

0080130275, 9780080130279

More Books

Students also viewed these Accounting questions

Question

What factors contribute to distortions in memory?

Answered: 1 week ago

Question

How do the two components of this theory work together?

Answered: 1 week ago