Asked by Raney Sumpter on Jul 22, 2024
Verified
Data concerning Bazin Corporation's single product appear below: 
Fixed expenses are $384,000 per month.The company is currently selling 6,000 units per month.The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $9 per unit.In exchange, the sales staff would accept a decrease in their salaries of $46,000 per month.(This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units.What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $27,500
B) decrease of $64,500
C) increase of $41,500
D) increase of $507,500
Sales Commissions
Payments made to sales personnel or agents, usually calculated as a percentage of the sales they directly generate.
Marketing Manager
A professional role responsible for developing, implementing, and overseeing marketing strategies and campaigns to promote a company's products or services.
Monthly Sales
The total revenue generated from goods or services sold by a business within a month.
- Examine the consequences of adjusting selling approaches, like pricing changes and enhanced promotional activities, on the corporation's fiscal performance.
Verified Answer
Net operating income increases by $27,500.
Learning Objectives
- Examine the consequences of adjusting selling approaches, like pricing changes and enhanced promotional activities, on the corporation's fiscal performance.
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