Farah, the owner of a used car dealership, is working on compensation plans for her employees. She is trying to evaluate how a commission-based versus salary-based workforce would affect her bottom line. In considering her options, she finds basic financial information of two companies with similar year-end performance but different compensation plansperfect examples to help her with her evaluation ! Company X uses a commission-based approach, where its sales staff operates exclusively on commission. Company Y, on the other hand, pays its sales staff a flat salary with no commission. Here are the basics for each company. Company X Company Y Current sales volume 10,000 units 10,000 units Selling price $50 $50 Variable cost per unit $20 $10 Fixed costs $100,000 $200,000

f. How will this analysis help Maddie and her board make their decision on whether to create commission-based or salary-based compensation plans for their sales force?