Question
In: Accounting
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently,...
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 12% commission on the units they sell for $100 each, plus a fixed salary of $41,900 per person. Glade hopes that by increasing commissions to 17% and decreasing each salesperson’s salary to $21,600, sales will increase because salespeople will be more motivated. Currently, sales are 20,000 units. Glade’s other fixed costs, NOT including the salespeople’s salaries, total $599,000. Glade’s other variable costs, NOT including commissions, total $17 per unit.
a. What is the current profit?
b. What is the current break-even point in units?
c. What would the break-even point in units be if
commissions are increased and salaries decreased?
d. If sales increase by 9,000 units, what will profit be under the new plan?
e. At what sales level would Glade be indifferent between the lower-commission plan and the higher-commission plan?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently,...
Glade, Inc. is trying to decide whether to increase the
commission-based pay of its salespeople. Currently, each of its
five salespeople earns a 6% commission on the units they sell for
$100 each, plus a fixed salary of $41,200 per person. Glade hopes
that by increasing commissions to 11% and decreasing each
salesperson’s salary to $21,200, sales will increase because
salespeople will be more motivated. Currently, sales are 20,000
units. Glade’s other fixed costs, NOT including the salespeople’s
salaries, total...
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently,...
Glade, Inc. is trying to decide whether to increase the
commission-based pay of its salespeople. Currently, each of its
five salespeople earns a 9% commission on the units they sell for
$100 each, plus a fixed salary of $40,200 per person. Glade hopes
that by increasing commissions to 14% and decreasing each
salesperson’s salary to $21,100, sales will increase because
salespeople will be more motivated. Currently, sales are 20,000
units. Glade’s other fixed costs, NOT including the salespeople’s
salaries, total...
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently,...
Glade, Inc. is trying to decide whether to increase the
commission-based pay of its salespeople. Currently, each of its
five salespeople earns a 7% commission on the units they sell for
$100 each, plus a fixed salary of $40,100 per person. Glade hopes
that by increasing commissions to 12% and decreasing each
salesperson’s salary to $21,500, sales will increase because
salespeople will be more motivated. Currently, sales are 17,000
units. Glade’s other fixed costs, NOT including the salespeople’s
salaries, total...
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently,...
Glade, Inc. is trying to decide whether to increase the
commission-based pay of its salespeople. Currently, each of its
five salespeople earns a 12% commission on the units they sell for
$100 each, plus a fixed salary of $41,100 per person. Glade hopes
that by increasing commissions to 17% and decreasing each
salesperson’s salary to $21,700, sales will increase because
salespeople will be more motivated. Currently, sales are 17,000
units. Glade’s other fixed costs, NOT including the salespeople’s
salaries, total...
Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the...
Omni Telecom is trying to decide whether to increase its cash
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rate.
P0
=
D1
Ke − g
P0 = Price of the stock today
D1 = Dividend at the end of the first
year
D1 = D0 × (1 +
g)
D0 = Dividend today
Ke = Required rate of return
g = Constant growth rate in dividends
D0 is currently $3.00, Ke
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Green Gadgets Inc. is trying to decide whether to cut its
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in order to have more money to invest in new projects. If it does
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A company pays its salespeople on a commission basis. The salespeople each receive $250 per week...
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A company pays its five salespeople on a commission basis. The
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(1)A local entertainment establishment, in a small town, is trying to decide whether it should increase...
(1)A local entertainment establishment, in a small town, is
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Revenue ($000) 3.0 4.0 2.0 4.0 7.0 3.0
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(a)Write a regression model that relates both variables in the
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