AC75067 company produces and sells a product with the following characteristics: Per Unit Selling price Variable expenses Contribution margin 2$ 246 57 $4 189 The AC75067 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month. The sales manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $31 per unit. In exchange, the sales staff would accept a decrease in their salaries of $69,000 per month. (This is the company's savings for the entire sales staff.) The manager predicts that introducing this sales incentive would increase monthly unit sales by 20%. What would be the overall effect on AC75067 company's monthly net operating income of this change? Multiple Choice increase of $91,528 < Prev 2 of 12 Next > MAR otv 56 17,650 14

AC75067 company produces and sells a product with the following characteristics: Per Unit Selling price Variable expenses Contribution margin 2$ 246 57 $4 189 The AC75067 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month. The sales manager would like to introduce commissions as an incentive for the sales staff. The sales manager has proposed a commission of $31 per unit. In exchange, the sales staff would accept a decrease in their salaries of $69,000 per month. (This is the company's savings for the entire sales staff.) The manager predicts that introducing this sales incentive would increase monthly unit sales by 20%. What would be the overall effect on AC75067 company's monthly net operating income of this change? Multiple Choice increase of $91,528 < Prev 2 of 12 Next > MAR otv 56 17,650 14

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Houpe Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 140 100% Variable expenses 42 30% Contribution margin $ 98 70% Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $58,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change?
Mauro Products sells a woven basket for $10 per unit. Its variable expense is $8 per unit and the company's monthly fixed expense is $2,600. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. Note: Do not round intermediate calculations. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? Note: Do not round intermediate calculations. 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets baskets
D) Nuevo Company manufactures a product which sells for P5. At present, the company produces and sells 50,000 units per year. Unit variable manufacturing and marketing expenses are P2.50 and P.50 respectively. Fixed expenses are P70,000 for tactonY overhead and P30,000 for marketing and administration. The sales manager hos proposed that the price be increased to P6. To maintain the present sales volume. advertising must be increased. The company's profit objective is 10% of sales. 2. Compute the additional expenditure the company can afford for advertising. E) The annuUal FC amounted to P798,000. At present, the contribution margin ratio is 42%. 3. Determine the amount of sales if the desired profit is P173,800 net of the ff. fax rates: For the first P100,000 25% In excess of P100,000 35% F) Bosh Company expects to incur the following costs to produce and sell 70,000 units of its product: Variable manufacturing cost Fixed manufacturing cost Variable marketing expense Fixed marketing…
2. Suppose you manufacture and sell motorcycle helmets. Helmets sell for $25 each. Information about the company's costs is as follows Variable manufacturing cost per unit Variable selling and administrative cost per unit Fixed manufacturing overhead per month Fixed selling and administrative cost per month $7 $3 $300,000 $600,000 e) Determine the sales volume required to reach an income of $1,300,000 in units of helmets. f) Estimate the company's monthly operating loss if it sells only 70,000 units of helmets.
Hi, I need help with the following problem. Thanks!
A company sells its product at P30 per unit.Unit variable cost is P22 and total fixed costs total to P100,000 per month. The company currently pays salaries of P40,000 per month but with no commission. It is considering a compensation plan whereby the sales people would receive 5% commission based on sales, but their salaries would be decreased to P25,000 per month. At what sales level is the company indifferent between the two compensation plans?
Sinclair Company's product has a selling price of £25 per unit. Last year the company reported a profit of £20,000 and variable expenses totalling £180,000. The product has a 40% contribution margin ratio. Because of competition, Sinclair Company will be forced in the current year to reduce its selling price by £2.00 per unit. How many units must be sold in the current year to earn the same profit as was earned last year? Select one: O A. 15,000 units O B. 12,000 units O C. 16,500 units O D. 12,960 units
According to its original plan, Thornton Consulting Services Company plans to charge its customers for service at $127 per hour in Year 2. The company president expects consulting services provided to customers to reach 49,000 hours at that rate. The marketing manager, however, argues that actual results may range from 44,000 hours to 54,000 hours because of market uncertainty. Thornton's standard variable cost is $44 per hour, and its standard fixed cost is $1,320,000. Required Develop flexible budgets based on the assumptions of service levels at 44,000 hours, 49,000 hours, and 54,000 hours. Flexible Budget 44,000 Hours Flexible Budget Flexible Budget 49,000 Hours 54,000 Hours
Wok of Fame, Inc., makes and sells woks at a price of $5.00 per unit. Variable cost is $3.00 per unit. The company's total fixed costs are $52,500. How much must total sales be if Wok of Fame wants to earn an operating income of $17,500? $100,000 $70,000 $175,000 $17,500 $26,250
Please help break it down. Thanks!
Need step by step explanation.Mauro Products distributes a single product, a woven basket whose selling price is $14 per unit and whose variable expense is $12 per unit. The company’s monthly fixed expense is $4,600. Required: Calculate the company’s break-even point in unit sales. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)