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Problem 6-119 (Algo) [LO 6-1, 6-4] Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of
Problem 6-119 (Algo) [LO 6-1, 6-4] Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 12% commission on the units they sell for $100 each, plus a fixed salary of $40,300 per person. Glade hopes that by increasing commissions to 17% and decreasing each salesperson's salary to $20,300, sales will increase because salespeople will be more motivated. Currently, sales are 21,000 units. Glade's other fixed costs, NOT including the salespeople's salaries, total $592,000. Glade's other variable costs, NOT including commissions, total $18 per unit. a. What is the current profit? Current Profit $ 676,500 b. What is the current break-even point in units? (Round your answer to the nearest whole number.) Break-Even Point 11,336 units c. What would the break-even point in units be if commissions are increased and salaries decreased? (Round your answer to the nearest whole number.) Break-Even Point units d. If sales increase by 8,000 units, what will profit be under the new plan?
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