company produces and sells product with the following characteristics: Per Unit ng price ble expenses ibution margin 230 49 2$ 181 3361 company is currently selling 7,000 units per month. Fixed expenses are $890,000 per month. s manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $23 per unit. In exchange, the sales staff would accept a decrease in their of $45,000 per month. (This is the company's savings for the entire sales staff.) ager predicts that introducing this sales incentive would increase monthly unit sales by 18%. What would be the overall effect on Ac23361 company's monthly net operating income of this change? tiple Choice increase of $96,560 increase of $102,720 increase of $76,456 increase of $83,080
company produces and sells product with the following characteristics: Per Unit ng price ble expenses ibution margin 230 49 2$ 181 3361 company is currently selling 7,000 units per month. Fixed expenses are $890,000 per month. s manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $23 per unit. In exchange, the sales staff would accept a decrease in their of $45,000 per month. (This is the company's savings for the entire sales staff.) ager predicts that introducing this sales incentive would increase monthly unit sales by 18%. What would be the overall effect on Ac23361 company's monthly net operating income of this change? tiple Choice increase of $96,560 increase of $102,720 increase of $76,456 increase of $83,080
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:AC23361 company produces and sells a product with the following characteristics:
Per Unit
Selling price
$
230
Variable expenses
49
Contribution margin
$
181
The AC23361 company is currently selling 7,000 units per month. Fixed expenses are $890,000 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 $23 per unit. In exchange, the sales staff would accept a decrease in their
salaries of $45,000 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 18%. What would be the overall effect on AC23361 company's monthly net operating income of this change?
Multiple Choice
increase of $96,560
increase of $102,720
increase of $76,456
increase of $83,080
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