Question
The following Information is about ABC Co's single product: Selling price Variable expenses Contribution margin Percent of Per Unit Sales $ 180 45 $135
The following Information is about ABC Co's single product: Selling price Variable expenses Contribution margin Percent of Per Unit Sales $ 180 45 $135 100% 25% 75% Fixed expenses are $1,048,000 per month. ABC Co. currently sells 9,400 units per month. Required: ABC considers Introducing sales commissions as an Incentive for the sales people and has proposed a commission of $12 per unit. Meanwhile, the sales people would agree with a decrease in their salaries of $106,000 per month. It is estimated that Introducing this sales Incentive would increase monthly sales by 440 units. How this change would Impact the company's monthly net operating Income? Change in net operating income
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