Question: Question 2: (4 marks: each sales level 2 marks) Data concerning Beta single product appear below: Selling price. Variable expenses....... Contribution margin ...... Per Unit

Question 2: (4 marks: each sales level 2 marks) Data concerning Beta single product appear below: Selling price. Variable expenses....... Contribution margin ...... Per Unit $800 200 $ 600 Percent of Sales 100% 25% 75% The company is currently selling 300 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff Fixed expenses are $ 80,000 per month. The marketing manager has proposed a commission of $20 per unit. In exchange, monthly salaries will decreases by $9.600 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 80 units. Instructions: What should be the overall effect on the company's monthly net operating income of this change? Use a comparative table for the two levels of production 300 and 380 units. (each level 2 marks) Solution

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