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

question 132

Multiple Choice

Data concerning Hinkson Corporation's single product appear below: Fixed expenses are $720,000 per month.The company is currently selling 8,000 units per month.The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $9 per unit.In exchange,the sales staff would accept a decrease in their salaries of $60,000 per month.(This is the company's savings for the entire sales staff. ) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units.What should be the overall effect on the company's monthly net operating income of this change?

• A)increase of $59,100
• B)decrease of $121,700
• C)increase of $894,300
• D)decrease of $1,700

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Definitions:

Buyers

Buyers are individuals or entities that purchase goods or services in the marketplace.

Sellers

Entities or people presenting items or services to be sold within the market.

Rent Control

Rent control is a government policy or regulation that sets a limit on how much landlords can charge for leasing apartments or houses, aimed at making housing more affordable.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price within a specific time period.