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

question 62

Essay

Data concerning Ulwelling Corporation's single product appear below: Fixed expenses are $753,000 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 $11 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $73,000 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!

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Definitions:

Legal Persons

Entities (such as individuals, companies, and organizations) that have legal rights and obligations, including the capacity to enter into contracts, sue, and be sued.

Federal And State Statutes

Laws enacted by the federal or state legislatures that govern various aspects of society and business.

Social Contract

A theory in political philosophy suggesting that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to an authority in exchange for protection of their remaining rights.

John Locke

A 17th-century English philosopher known for his work on political philosophy and theory of knowledge.