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

question 176

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Data concerning Emmanuel Corporation's single product appear below: 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! 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:

Ownership Interests

The legal rights and claims an individual or entity has over a property or business.

Partition

The division of real property among co-owners so that each owns a specific portion of the property, or the sale of such property and division of proceeds among co-owners.

Voluntary Act

An action undertaken by an individual with full awareness and of free will, without coercion.

Joint Tenant

A co-owner of a property where each tenant has an equal share and rights, with the stipulation that upon the death of one tenant, their share automatically transfers to the surviving joint tenant(s).

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