Question
In: Accounting
Management is considering a change in the sales force compensation plan. Currently each of the firm's...
Management is considering a change in the sales force compensation plan. Currently each of the firm's two salespeople is paid a salary of $2,500 per month.
g-1. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.85 per unit, assuming a sales volume of 5,050 units per month. (Do not round intermediate calculations.)
g-2. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.85 per unit, assuming a sales volume of 6,450 units per month. (Do not round intermediate calculations. Losses should be indicated by a minus sign.)
h-1. Assuming that the sales volume of 6,450 units per month achieved in part g could also be achieved by increasing advertising by $1,000 per month instead of changing the sales force compensation plan. What would be the operating income or loss? (Do not round intermediate calculations. Losses should be indicated by a minus sign.)
h-2. Which strategy would you recommend?
| Plan to change the sales force compensation. | |
| Plan to increase advertising expenses. |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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1) How is the scope management plan related to the change
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i
need an answer for this question only (1. How is the scope
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is that current assets will rise directly with sales while fixed
assets will rise by $400,000. The firm presently has $2,400,000 in
accounts payable, $1,400,000 in long-term debt, and $9,200,000 in
common equity. All current liabilities are expected to change
directly with sales. CCC plans to pay $800,000 in dividends next...
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is that current assets will rise directly with sales while fixed
assets will rise by $200,000. The firm presently has $3,500,000 in
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Choosing a sales compensation plan is an important decision. However, there is no one size fits...
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