Airborne Inc., a company selling air purifier has estimated the market capacity as 50,000 units a year, divided evenly...

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Airborne Inc., a company selling air purifier has estimated the market capacity as 50,000 units a year, divided evenly over 5 sales areas. The directors have set the company a sales objective of between 50% to 80% of this potential. The sales force is divided into 5 equal areas and the objective is expected to be achieved by using the sales men in the following manner; Number of salesmen Market penetration expected Used per area & 5 6 7 8 9 10 11 A B C D E All the products are manufactured at one location. The ex- factory cost (Variable) is $80 each and sold at a standard price of $ 100 each. The transport and installation cost varies in relation to the distance from the factory as follows: 50% 58% 65% 71 % 76% Sales area Variable distribution cost per unit $ 10 8 6 4 78% 80% 2 35 salesmen will be employed at an average cost of $ 8,000 each per annum. Given that there must be at least 5 salesmen per area, you are required to do the following. A) Calculate the highest total contribution possible using all the 35 salesmen B) Advise whether increase in the sales force would improve the total contribution.

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STEP 1 STEP 2 NB Question mentioned that we shall utilize the machinery evenly So 50 000 is a View the full answer