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Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit $ 140 28 $ 112 Percent of Sales 100%
Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit $ 140 28 $ 112 Percent of Sales 100% 20% 80% Fixed expenses are $1,055,000 per month. The company is currently selling 9,700 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 $10 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $101,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income Naumann Corporation produces and sells a single product. Data concerning that product appear below: Selling price Variable expenses Contribution margin Per Unit $260 65 $ 195 Percent of Sales 100% 25% 75% Fixed expenses are $180,000 per month. The company is currently selling 1,300 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $54. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.) Change in net operating income
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