Variable expenses per unit: Direct Material $20 Direct Labour $50 Variable Manufacturing Overhead $10 Fixed expenses: Fixed Manufacturing Overhead $125,000 Fixed Selling Costs $75,000 Fixed Administrative Costs $100,000 selling price per unit 200 operating income 420000 the business is considering paying a commission to its sales team as part of the sales expansion effort, which should result in an increase in sales revenue. The head of the marketing department has indicated that the effort of the sales team should result in a 15% increase in sales volume. Calculate the new break-even sales figure, 2) the new margin of safety and 3) the new operating profit, to determine whether the new sales commission plan is indeed viable.
Variable expenses per unit: Direct Material $20
Direct Labour $50
Variable Manufacturing Overhead $10
Fixed expenses: Fixed Manufacturing Overhead $125,000
Fixed Selling Costs $75,000
Fixed Administrative Costs $100,000
selling price per unit 200
operating income 420000
the business is considering paying a commission to its sales team as part of the sales expansion effort, which should result in an increase in sales revenue. The head of the marketing department has indicated that the
effort of the sales team should result in a 15% increase in sales volume.
Calculate the new break-even sales figure, 2) the new
margin of safety and 3) the new operating profit, to determine whether the new sales commission plan is
indeed viable.
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