Dubitsky Corporation Produces and Sells a Single Product

question 141

Essay

Dubitsky Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $516,000 per month.The company is currently selling 7,000 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 $9 per unit.In exchange,the sales staff would accept an overall decrease in their salaries of $55,000 per month.The marketing manager predicts that introducing this sales incentive would increase monthly sales by 200 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:

Maintaining Confidentiality

Refers to the process of protecting private information from unauthorized access or disclosure.

Client Recordings

Audio or visual records of interactions between professionals and their clients, used for a variety of purposes including review, supervision, and ensuring quality of service.

Soundproof Dictation

The process of verbally recording information or transcribing speech in an environment insulated from external noise to ensure clarity and privacy.

Tarasoff Case

A legal case that established a precedent in U.S. law for mental health professionals' duty to warn identifiable individuals if a client makes threats of violence toward them.