A corporation charges P30 per unit for their goods. The monthly unit variable cost is P22, while the total fixed expenses are P100,000. The firm now pays monthly salary of P40,000 without commission. It is exploring a pay plan in which salesmen would earn a 5% commission on sales, but their monthly salary would be reduced to P25,000. At what point in the sales cycle is the corporation unconcerned about the two compensation plans?
A corporation charges P30 per unit for their goods. The monthly unit variable cost is P22, while the total fixed expenses are P100,000. The firm now pays monthly salary of P40,000 without commission. It is exploring a pay plan in which salesmen would earn a 5% commission on sales, but their monthly salary would be reduced to P25,000. At what point in the sales cycle is the corporation unconcerned about the two compensation plans?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A corporation charges P30 per unit for their goods. The monthly unit variable cost is P22, while the total fixed expenses are P100,000. The firm now pays monthly salary of P40,000 without commission. It is exploring a pay plan in which salesmen would earn a 5% commission on sales, but their monthly salary would be reduced to P25,000. At what point in the sales cycle is the corporation unconcerned about the two compensation plans?
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