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may i please get answers to these questions step by step asap? Question 3a Data concerning Utahloy Corporation's single product. Selling price $195, Variable cost
may i please get answers to these questions step by step asap?
Question 3a Data concerning Utahloy Corporation's single product. Selling price $195, Variable cost $39. Fixed expenses are $650,000 per month. The company is currently selling 8,000 units per month. Required: The manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $79,000 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? Will you accept or reject the proposal, why and why not? Show your work. (14 marks) Question 3 Jake Ta Company sells coffee for $25 each. Variable cost per cup is $10. The company is planning on renting an exhibition booth for both display and selling purposes of their signature coffee. The convention coordinator allows 3 options: Option 1: paying a fixed booth fee of $5,000 or Option 2: paying an $4,000 fee plus 10% of revenue made at the convention or Option 3: paying 20% of revenue made at the convention Required: (1) Compute the breakeven sales in unit for each option. (6 marks) (in) Compute profit for each option and indicate which option should Jake Ta Company choose, assuming sales are expected to be 800 coffees? (7 marks) (iii) What is fixed cost and what is variable cost? Explain why the distinction between variable and fixed costs is important in cost accounting. (Word limit: 200 words- 6 marks) End of examination paper Step by Step Solution
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