Robledo Corporation Produces and Sells a Single Product

question 113

Multiple Choice

Robledo Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $625,000 per month. The company is currently selling 9,000 units per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Robledo Corporation.Refer to the original data when answering this question. The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $8 per unit.In exchange,the sales staff would accept a decrease in their salaries of $57,000 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 $56,200
• B)Decrease of $121,800
• C)Increase of $712,200
• D)Decrease of $7,800

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Definitions:

Economic Resources

The assets and inputs required for the production of goods and services, including land, labor, capital, and entrepreneurship.

Per Capita GDP

The gross domestic product of a country divided by its population, providing a per person average that helps in comparing economic well-being across different nations.

Population

The total number of people inhabiting a specific area or country.

Compiling GDP

The process of calculating the gross domestic product of a country, involving summing the total value of all goods and services produced.