Your wholesale auto parts company is considering expanding its territory to Illinois. To do so, you would need to hire sales reps to cover the new territory and are considering how many reps are optimal for your company.

If the margin (sales revenue minus COGS divided by sales) is 30%, and sales reps cost $9,000 per month (including salary, benefits, and travel expenses), how many sales reps should you employ? Based on that level of sales reps, how much incremental (monthly) profit will you generate by selling in Illinois?

Number of Sales Reps	Total monthly sales revenue in Illinois
0	-
1	55,000
2	97,000
3	139,000
4	168,000
5	192,000
6	214,000
7	230,000
8	246,000
9	260,000
10	270,000

Contribution is revenue minus cost of goods sold.

Sales Rep Cost is the cost per month multiplied by the number of sales reps.

Net benefits is the Contribution minus the sales rep costs.

Marginal benefit is the change in benefits by adding one more sales rep. In other words, how much do benefits go up by increasing to that sales level.

Marginal cost is the change in sales rep costs by adding one more salesperson.

Marginal net benefit is the difference between marginal benefit and marginal cost.