Data concerning Wislocki Corporation's single product appear below: Percent of Sales 100% 25% 75% Per Unit $ 160 40 $ 120 Selling price Variable expenses Contribution margin Fixed expenses are $1,036,000 per month. The company is currently selling 9,500 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 $110,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 520 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% 25% 75% Per Unit $ 160 40 $ 120 Selling price Variable expenses Contribution margin Fixed expenses are $1,036,000 per month. The company is currently selling 9,500 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 $110,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 520 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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Transcribed Image Text:Data concerning Wislocki Corporation's single product appear below:
Percent of
Sales
100%
25%
75%
Selling price
Variable expenses
Contribution margin
Per Unit
$ 160
40
$ 120
Fixed expenses are $1,036,000 per month. The company is currently selling 9,500 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 $110,000 per
month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 520 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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