Question

In: Accounting

Maria Pajet, a regional sales representative for UniTec Systems, Inc., has been working about 80 hours...

Maria Pajet, a regional sales representative for UniTec Systems, Inc., has been working about 80 hours per week calling on a total of 123 regular customers each month. Because of family and health considerations, she has decided to reduce her hours to a maximum of 160 per month. Unfortunately, this cutback will require Maria to turn away some of her regular customers or, at least, serve them less frequently than once a month. Maria has developed the following information to assist her in determining how to best allocate time:

Customer Classification
Large
Business
Small
Business
Individual
Number of customers 8 35 80
Average monthly sales per customer $4,500 $2,400 $1,100
Commission percentage 5% 8% 10%
Hours per customer per monthly visit 5.0 3.0 2.5


a. Develop a monthly plan that indicates the number of customers Maria should call on in each classification to maximize her monthly sales commissions.
b. Determine the monthly commissions Maria will earn if she implements this plan.

In the first table, calculate the commission per customer and per hour for each customer classification.

In the second table, complete the monthly call/visit plan that would maximize Maria's monthly sales commissions. Then determine Maria's monthly commissions if she implements this plan.

Commission
per customer
Commission
per hour
Large business $Answer $Answer
Small business $Answer $Answer
Individual $Answer $Answer
Monthly Call/Visit Plan

Total number

of customers

Total number

of visit hours

Total

commissions

Large business Answer Answer Answer
Small business Answer Answer Answer
Individual Answer Answer Answer
Grand totals: $Answer Answer $Answer

Solutions

Expert Solution

a.

Commission per customer Commission per hour
Large business $225 $45
Small business $192 $64
Individual $110 $44

Working:

Commission per customer Commission per hour
Large business $4500 x 5% $225/5
Small business $2400 x 8% $192/3
Individual $1100 x 10% $110/2.5

b.

Monthly Call / Visit Plan
Total number of customers Total number of visit hours Total commissions
Large business 8 40 $                                              1,800
Small business 35 105 $                                              6,720
Individual 80 200 $                                              8,800
Grand totals: 123 345 $                                           17,320

Working:

Monthly Call / Visit Plan
Total number of customers Total number of visit hours Total commissions
Large business 8 8 x 5 40 x $45
Small business 35 35 x 3 105 x $64
Individual 80 80 x 2.5 200 x $44

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