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In: Accounting

Data concerning Wislocki Corporation's single product appear below: Per Unit Percent of Sales Selling price $...

Data concerning Wislocki Corporation's single product appear below:

Per Unit Percent of Sales
Selling price $ 185 100 %
Variable expenses 37 20 %
Contribution margin $ 148 80 %

Fixed expenses are $1,047,000 per month. The company is currently selling 9,300 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 $13 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $107,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 430 units. What should be the overall effect on the company's monthly net operating income of this change?

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Expert Solution

ekkarill92 answered 2 years ago
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