The vice president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission basis. Given the increased incentive, they expect net sales to increase by 15%. As a result, they estimate that gross profit will increase by $58,642 and expenses by $84,970.

Compute the expected new net income. Then, compute the revised profit margin and gross profit rate. (Ignore income tax effects.)

Answer rating: 100% (QA)

Previous Year Expenses Gross Profit Net Income 492900 63600 429300 New Sales 1590000 ... View the full answer