Monterey Co. makes and sells a single product. The current selling price is $16 per unit. Variable expenses are $9.6 per unit, and fixed expenses total $31,600 per month. (Unless otherwise stated, consider each requirement separately.)

f.	Calculate the monthly operating income (or loss) that would result from a $1 per unit price increase and a $6,000 per month increase in advertising expenses, both relative to the original data. Assume a sales volume of 5,250 units per month. (Do not round your intermediate calculations.)

rev: 02_14_2014_QC_45138

rev: 11_07_2013_QC_38537

26.

Required information

Management is considering a change in the sales force compensation plan. Currently each of the firm's two salespeople is paid a salary of $2,500 per month.

g.1	Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $1 per unit, assuming a sales volume of 5,250 units per month. (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)

g.2	Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $1 per unit, assuming a sales volume of 6,100 units per month. (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)

h.1	Assuming that the sales volume of 6,100 units per month achieved in part g could also be achieved by increasing advertising by $1,000 per month instead of changing the sales force compensation plan. What would be the operating income or loss? (Do not round your intermediate calculations.)