This Question Is to Be Considered Independently of All Other

question 25

Multiple Choice

This question is to be considered independently of all other questions relating to Boenisch 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 $16 per unit. In exchange, the sales staff would accept a decrease in their salaries of $102,000 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 700 units. What should be the overall effect on the company's monthly net operating income of this change?

• A)decrease of $193,600
• B)increase of $554,400
• C)increase of $90,800
• D)increase of $10,400

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Definitions:

Expected Return

The anticipated average return of an investment over a specific period, considering various probable outcomes.

Realized Return

The actual gain or loss experienced on an investment, calculated by taking the difference between the selling price and the purchase price.

Term Life

Term life is a type of life insurance policy that provides coverage at a fixed rate of payments for a limited period, known as the relevant term.

Death Benefit

The sum paid to a beneficiary upon the insured’s death, provided through a life insurance policy.