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Required Information [The following Information applies to the questions displayed below) Monterey Co. makes and sells a single product. The current selling price is $15
Required Information [The following Information applies to the questions displayed below) Monterey Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9 per unit, and fixed expenses total $29,900 per month (Unless otherwise stated, consider each requirement separately) Management is considering a change in the sales force compensation plan. Currently each of the firm's two salespeople is paida salary of $2,500 per month 9-1. Calculate the monthly operating Income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.85 per unit, assuming a sales volume of 5,150 units per month (Do not round Intermediate calculations.) 9-2. Calculate the monthly operating Income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.85 per unit, assuming a sales volume of 6,100 units per month (Do not round Intermediate calculations. Losses should be Indicated by a mlnus slgn.) h:1. Assuming that the sales volume of 6,100 untts per month achieved in party could also be achieved by increasing advertising by $1.000 per month instead of changing the sales force compensation plan What would be the operating income or loss? (Do not round Intermediate calculations. Losses should be indicated by a minus sign.) h-1. Assuming that the sales volume of 6,100 units per month achieved in part g could also be $1,000 per month Instead of changing the sales force compensation plan. What would be the round Intermediate calculations. Losses should be Indicated by a minus sign.) h-2. Which strategy would you recommend? O Plan to increase advertising expenses. O Plan to change the sales force compensation
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