QUESTION 18

Waterfront Inc sells product AB $250. Product AB cost Waterfront $100 wholesale and they pay 5% sales commission to the sales staff for each Product AB sold. Total monthly fixed costs consist of $11,000 in fixed overhead and $2, 750 in fixed selling and administrative costs. Required: Compute the break-even point in units How many units must be sold to earn an after tax profit of $11, 550 (tax rate 40%)? What would be the break-even point in units if the sales commission is eliminated and replaced with a flat salary of $17,000 per month