Per Unit

Selling Price $230

Variable Expenses 49

Contribution Margin $181

So if a company is currently selling 7,000 units per month. Fixed expenses are $890,000 per month.

And the sales manager would like to introducecommissions as an incentive for the sales staff. The sales manager proposes a commission of $23 per unit. In exchange, the sales staff would accept a decrease in their salaries of $45,000 per month.

Themanager predicts that introducing this sales incentive would increase monthly unit sales by 18%. What would be the overall effect on the company's monthly net operating income of this change?