Data Concerning Ulwelling Corporation's Single Product Appear Below: Fixed

question 88

Essay

Data concerning Ulwelling Corporation's single product appear below: Fixed expenses are $753,000 per month. The company is currently selling 8,000 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 $11 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $73,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!

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Definitions:

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50% of the time, reflecting the lowest level of sensory input that is perceptible.

Difference Threshold

The minimum difference in stimulation required to distinguish between two stimuli.

Absolute Threshold

The lowest level of a stimulus that can be perceived half the time by an individual.

Hearing Test

A procedure used to evaluate a person's ability to hear various sounds, frequencies, and volumes, typically conducted by an audiologist.