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The sole product of Atto SARL sells for $110 and its fixed costs total $364,000. Sales are currently 5,900 per month. Variable costs per unit
The sole product of Atto SARL sells for $110 and its fixed costs total $364,000. Sales are currently 5,900 per month. Variable costs per unit currently total 30% of the sales price. Consider the following alternatives to increase sales independent of each other: Part A Sales associates currently do not receive any commissions on their sales. The marketing manager thinks that a commission of $12 per sale along with a decrease in the sales department's monthly salary budget of $43,000 would inspire sales associates to sell an additional 100 units per month collectively. What would the effect of this plan be on monthly operating income? of $ Part B A new marketing campaign is being contemplated that would cost $6,000 per month and have the expected effect of increasing sales per month by 140 units. If this campaign is undertaken, what is the expected effect on monthly income? Part Management believes monthly sales can be increased by 740 units if additional quality control steps are taken. These steps would mean an increased variable cost per unit of $6. What is the expected effect on the company's monthly income of adding these additional quality control steps
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