Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 13% commission

Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 13% commission on the units they sell for $100 each, plus a fixed salary of $41,300 per person. Glade hopes that by increasing commissions to 18% and decreasing each salespersons salary to $20,300, sales will increase because salespeople will be more motivated. Currently, sales are 20,000 units. Glades other fixed costs, NOT including the salespeoples salaries, total $584,000. Glades other variable costs, NOT including commissions, total $16 per unit.

image text in transcribed

--

Any help is much appreciated!

a. What is the current profit? Current Pro b. What is the current break-even point in units? (Round your answer to the nearest whole number.) Break-even Point units What would the break-even point in units be if commissions are increased and salaries decreased? (Round your answer to the nearest whole number.) Break-even Point unis d. If sales incresce by 12,000 units, what will profit be under the new plan? Prof: Under the New Plan e. At what sales level would Glede be incifferent between the lower-commission plan and the higher-commission plan? Point of Inderence

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

IRS Audit Protection And Survival Guide Trucking Industry

Authors: Daniel J. Baran, Gerald F. Bernard, James E. Brown

1st Edition

0471166413, 978-0471166412

More Books

Students also viewed these Accounting questions