The question:

Use the information in assignment 2.12 on pg. 2-27 to compute the estimated operating income of the company if the salary and 5% commission option is chosen.

(your answer should be rounded to the nearest whole dollar, and no $ signs should be used.)

Here is all the info needed:

2.12 (LO 2) Cost estimation Managers of Tom Brown Distributors are evaluating the compensation system for the companys sales personnel. Currently, the two salespeople have a combined salary of $50,000 per year and earn a 4% sales commission.

The company is considering two alternatives to the current compensation system. The first alternative is to reduce total salaries to $20,000 and increase the sales commission to 5%. The second alternative is to eliminate the salaries and pay a 25% sales commission.

Sales projections under each of the compensation systems are as follows:

Current system	$900,000
Salary and 5% commission	$1,100,000
25% commission	$1,300,000