Data concerning Wislocki Corporation's single product appear below: Percent of Sales 100% 20% 80% Selling price Variable expenses Contribution margin Per Unit $ 190 38 $152 Fixed expenses are $1,050,000 per month. The company is currently selling 9,600 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $10 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 460 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
Data concerning Wislocki Corporation's single product appear below: Percent of Sales 100% 20% 80% Selling price Variable expenses Contribution margin Per Unit $ 190 38 $152 Fixed expenses are $1,050,000 per month. The company is currently selling 9,600 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $10 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 460 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Data concerning Wislocki Corporation's single product appear below:
Percent of
Sales
100%
20%
80%
Selling price
Variable expenses
Contribution margin
Per Unit
$190
38
$ 152
Fixed expenses are $1,050,000 per month. The company is currently selling 9,600 units per month.
Required:
The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing
manager has proposed a commission of $10 per unit. In exchange, the sales staff would accept an overall decrease in
their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would
increase monthly sales by 460 units. What should be the overall effect on the company's monthly net operating
income of this change?
Change in net operating income
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