Modern Fun Corporation sells electronic games. Its three salespersons are currently being paid fixed salaries of $\$ 30,000$ each; however, the sales manager has suggested that it might be more profitable to pay the salespersons on a straight commission basis. He has suggested a commission of 15 percent of sales. Current data for Modern Fun Corporation are as follows:

Sales volume 15,000 units Sales price ..... $\$ 40$ per unit Variable costs . ..... $\$ 29$ per unit Fixed costs ..... $\$ 140,000$

1. Assuming that Modern Fun Corporation has a target income of $\$ 50,000$ for next year, which alternative is more attractive?

2. The sales manager believes that by switching to a commission basis, sales will increase 20 percent. If that is the case, which alternative is more attractive? (Assume that sales are expected to remain at 15,000 units under the fixed salary alternative.)