Multiple Choice Question

Bluin Corporation pays its salesperson a flat salary of $$5,750$ per month and is considering paying $$30$ per unit instead. Current unit sales are $250$ per month, but

Bluin believes the compensation change will increase unit sales by $50\%.$ Bluin's current contribution margin is $$100$ per unit. If Bluin switches the compensation

and sales grow as expected, net operating income will

per month.

increase by $$1,250$

decrease by $$7,500$

increase by $$7,000$

decrease by $$5,500$