Page 4 of 10 Setz nothit Inc is facing a problem with their 4th quarter earnings on December 25. Their earnings target is $2,500,000 and the Mpha data so far is as follows: Sales Revenue $25,000,000 (S500/unit) $10,000,000 (S200/unit) $10,000,000 Variable COGS Fixed OH Fixed SG&A $2,000,000 5% Variable SG&A Smoothit has had a policy of having zero inventories at the end of each quarter. No further sales are possible during the year and all the units produced so far have been sold, The CEO is planning to cut the sales commission to meet the earnings target, but the accountant, Mr. Shady Helper, plans on suggesting producing items for inventory. 6.1 How much will the sales commissions have to be cut in order to meet the earnings target? How many items need to be produced for inventory to meet the earnings target if the sales commission is left unchanged at 5%? 6DHOW much sales comm961ons have to be cutin order to nmeet the earnungp langet? OSet up VC 1IS! Sates MMA to Finet vsean MIN 7 Cevne heve and finsh 25,000,000 10,000,000 GO0,000 \4,500,C00 sge 10,000,000 2,000,000 #25,000,000 10,000,C00 ons ca VseriA CM FOH FS6MA NO1 ps ba 13, 180,000 10,000,000 2,000,000 1,750,000 GNorkkackwaets i#200.00 laget nere (ZITH (ROB (DEL to Find New% wyo fate VSGA=5% S0ales -5% X25,00o,c0. 1,250,000 Oind new % VoGA/Sales New% latec 0.02.or 2%. me hta 0%-2% 3%. 62,000,000 lommissions would have to be.c by .. How many HemO needl to he prodused orihuentony tooet the eamings targetuthe sares.conuszioVL laftuinouanged This waud be unng Absorphion Costing nethod tolaluns a5%7 OFind Dfference ofTP4.01d Prout: 2,100,000-1350,000 750,000 Find FOH Amound needed! 10,000,000-750,000 9,250/000 Find tolal units noedad: 10,000,000 x5D,000.9,25D,000. 10,000,000 x185 Y=#54,081.05 50,000 unikalragd Wade 4,054.05umls