Question: Data concerning Header Corporation's single product appear below: Per Unit Percent of Sales Selling price $190 100% Variable expenses 33 20% Contribution margin $157 80%

Data concerning Header Corporation's single product appear below:

Per Unit

Percent of Sales

Selling price

$190

100%

Variable expenses

33

20%

Contribution margin

$157

80%

Fixed expenses are $1,050,000 per month. The company is currently selling 9,600 units per month.

Required: Show your work.

a. Construct the company's contribution format income statement for 9,600 units. (Do not round intermediate calculations.)

b. 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 an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 470 units.

c. What will be the overall effect on the company's monthly net operating income of this change?

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