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First picture is the question that I need. The second picture is guidance. Thanks! c. MSM Company management believes that monthly sales should average approximately
First picture is the question that I need. The second picture is guidance. Thanks!
c. MSM Company management believes that monthly sales should average approximately $425,000 during 2023. Prepare two contribution type income statements using (1) the current cost structure model (the model that includes salaries but no commissions) and (2) a second contribution type income statement using the proposed (fixed salary plus commission) model. 4. The firm is considering reducing monthly fixed salaries (currently $58,000 ) and using a combination salary and commission employee compensation plan. The reduction in fixed salaries would equal $12,000 monthly and be replaced with a 3% of gross sales commission payment. The 3% would be shared by all fixed salary employees. a. Calculate the new breakeven point in monthly sales dollars. ANS: $128,000/37%=$345,946 b. Calculate the new level of monthly sales dollars needed to eam an operating profit of $18,000 monthly. ANS: (128,000+18,000)/37%=$345,595 Step by Step Solution
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