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Maria is in management at Pandora, a chain jewelry store with a national footprint. She is part of a team which is working on attempting
Maria is in management at Pandora, a chain jewelry store with a national footprint. She is part of a team which is working on attempting to boost profits, and she has been tasked with analyzing three different scenarios which might affect Pandora's costs, the volume of units they sell, and ultimately their profits. The table below contains Pandora's current month's contribution margin income statement, for sales of 1,000 units. Sales $75,000 Variable Costs $25,000 Contribution Margin $50,000 Fixed Costs $20,000 Net Operating Income $30,000 Should Pandora cut sales commissions by $5 per unit and increase the monthly salaries by $2,000 if that led to an decrease in sales of 10%? No profits would decrease by $500 No, profits would decrease by $2.500 Yes, profits would increase by $3.000 Yes, profits would increase by $8,500
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