AC75067 company produces and sells a product with the following characteristics: Per Unit Selling price Variable expenses Contribution margin 2$ 246 57 $4 189 The AC75067 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month. The sales manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $31 per unit. In exchange, the sales staff would accept a decrease in their salaries of $69,000 per month. (This is the company's savings for the entire sales staff.) The manager predicts that introducing this sales incentive would increase monthly unit sales by 20%. What would be the overall effect on AC75067 company's monthly net operating income of this change? Multiple Choice increase of $91,528 < Prev 2 of 12 Next > MAR otv 56 17,650 14

AC75067 company produces and sells a product with the following characteristics: Per Unit Selling price Variable expenses Contribution margin 2$ 246 57 $4 189 The AC75067 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month. The sales manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $31 per unit. In exchange, the sales staff would accept a decrease in their salaries of $69,000 per month. (This is the company's savings for the entire sales staff.) The manager predicts that introducing this sales incentive would increase monthly unit sales by 20%. What would be the overall effect on AC75067 company's monthly net operating income of this change? Multiple Choice increase of $91,528 < Prev 2 of 12 Next > MAR otv 56 17,650 14

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

AC75067 company produces and sells a product with the following characteristics:
Per Unit
Selling price
Variable expenses
Contribution margin
24
246
57
$
189
The AC75067 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month.
The sales manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a
commission of $31 per unit. In exchange, the sales staff would accept a decrease in their salaries of $69,000 per month. (This is the
company's savings for the entire sales staff.)
The manager predicts that introducing this sales incentive would increase monthly unit sales by 20%. What would be the overall
effect on AC75067 company's monthly net operating income of this change?
Multiple Choice
increase of $91,528
( Prev
2 of 12
Next >
i T國4C
MAR
etv
56
17,650
14

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