Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thornbrough Corporation produces and sells a single product with the following characteristics: Percent of Per Unit Sales Selling price $220 100% Variable expenses 44 20%

image text in transcribed
Thornbrough Corporation produces and sells a single product with the following characteristics: Percent of Per Unit Sales Selling price $220 100% Variable expenses 44 20% Contribution margin $176 80% The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $65.000 per month. (This is the company's savings for the entire sales staff) The marketing manager predicts that introducing this sales Incentive would increase monthly sales by 300 units. What should be the overall effect on the company's monthly net operating income of this change? Multiple Choice decrease of $92.500 increase of $37,500 increase of $1.269,500 increase of $61,700

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Edmonds, old, Mcnair, Tsay

2nd edition

9780077392659, 978-0-07-73417, 77392655, 0-07-734177-5, 73379557, 978-0073379555

More Books

Students also viewed these Accounting questions

Question

Should some persons be exempt from garnishment orders? Explain.

Answered: 1 week ago

Question

2. Outline the functions of nonverbal communication

Answered: 1 week ago