Data Concerning Emmanuel Corporation's Single Product Appear Below

question 98

Essay

Data concerning Emmanuel Corporation's single product appear below:
Fixed expenses are $650,000 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 $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $79,000 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!

---

Definitions:

Volunteer

A person who freely offers to undertake tasks, services, or efforts without expecting payment in return.

Attorney

A person legally appointed or qualified to represent others in legal matters, also known as a lawyer.

Maslow's Theory

A psychological theory proposed by Abraham Maslow that suggests human needs are arranged in a hierarchy, with basic needs at the bottom and self-actualization at the top.

Human Needs

The basic requirements necessary for individuals to survive and thrive, including food, water, shelter, safety, belonging, and self-esteem.