Respuesta :
Answer:
Increase in income= $37,500
Explanation:
Giving the following information:
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.
The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units.
Per Unit Percent of Sales Selling price $ 220
Variable expenses 44
Contribution margin $ 176
Increase in income:
Sales= 300*176= 52800
Decrease in fixed costs= 65000
increase in variable cost= 11*7300=80,300 (-)
Increase in income= $37,500
Answer:
What should be the overall effect on the company's monthly net operating income of this change?
Increase of $37,500
Explanation:
- It means that the changes of fixed cost to variable cost improve the Operating Income of the company
- It's better for the company to pay a commission of $11 to the sales staff instead of a fixed salary.
- Original Income Statement without Changes
Income Statement
7.000 Quantities
$220 Unit Price
$1,540,000 Sales
-$44,0 Variable Cost
-$308.000 Total Cost
$1.231.956 Contribution Margin
-$901.000 Fixed Cost
$330.956 Operating Income
- New version of Income Statement with the changes proposed
Income Statement
7.300 Quantities
$220,0 Unit Price
$1.606.000 Sales
-$55,0 Variable Cost + Commission
-$401.500 Total Cost
$1.204.445 Contribution Margin
-$836.000 Fixed Cost
$368.445 Operating Income
- $37.489 - Increase over the last situation.