Wertman Corporation produces and sells a single product with the fol... Wertman Corporation produces and sells a single product with the following characteristics: Per Unit Percent of Sales Selling price $227 100% Variable expenses 110 48% Contribution margin $ 117 52% The company is currently selling 2,200 units per month. Fixed expenses are $221,000 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 $18 per unit. In exchange, the sales staff would accept a decrease in their salaries of $72,000 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 376 units. What should be the overall effect on the company's monthly net operating income? Increase by $73,624 Decrease by $71,624 Increase by $69,624 Increase by $75,624

 Wertman Corporation produces and sells a single product with the fol...

Wertman Corporation produces and sells a single product with the following characteristics:

	Per Unit	Percent of Sales
Selling price	$227	100%
Variable expenses	110	48%
Contribution margin	$ 117	52%

The company is currently selling 2,200 units per month. Fixed expenses are $221,000 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 $18 per unit. In exchange, the sales staff would accept a decrease in their salaries of $72,000 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 376 units. What should be the overall effect on the company's monthly net operating income?

 

	Increase by $73,624
	Decrease by $71,624
	Increase by $69,624
	Increase by $75,624

 

Answer
Increase by $69,624