Question: Jason has been able to break even the last two years, but cannot turn a profit. He must earn $9,000 in operating income next year.

Jason has been able to break even the last two years, but cannot turn a profit. He must earn $9,000 in operating income next year.

Selling price per unit=$7.50

Cost for paper per unit=$.75

Cost for printing per unit=$.85

Cost for film per unit=$.45

Staff salaries=$46,000

Other operating costs=$27,030

What is the operating income if he moves to commission-based compensation plan, saving $20,000 in salary; incurs $1.60/unit sold commission, which should increase sales volume by 20%?

After-tax operating income if the tax rate is 25%?

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