Pathways Careers,Inc.has two products-Resume Reader and Cover Letter Cure.Financial data for both the products follow: $$\begin{array} { | l | r | r | }
\hline & \begin{array} { r }
\text { Resume } \
\text { Reader }
\end{array} & \begin{array} { r }
\text { Cover Letter } \
\text { Cure }
\end{array} \
\hline \text { Units sold } & 2000 \text { units } & 600 \text { units } \
\hline \text { Sales price per unit } & \$ 700 & \$ 1200 \
\hline \text { Variable manufacturing cost per unit } & 310 & 650 \
\hline \text { Sales commission (\% of sales) } & 5 \% & 3 \% \
\hline
\end{array}$$ Pathways has two sales representatives-Curtis Muller and Willow Brown.Each sales representative sold a total of 1300 units during the month of March.Curtis had a sales mix of 80% Resume Reader and 20% Cover Letter Cure.Willow had a sales mix of 60% Resume Reader and 40% Cover Letter Cure.Based on the above information,calculate Willow's total contribution to company profits.
A)$544,180
B)$590,200
C)$276,900
D)$267,280

Question

Pathways Careers,Inc.has two products-Resume Reader and Cover Letter Cure.Financial data for both the products follow: $$\begin{array} { | l | r | r | } 
\hline & \begin{array} { r } 
\text { Resume } \
\text { Reader }
\end{array} & \begin{array} { r } 
\text { Cover Letter } \
\text { Cure }
\end{array} \
\hline \text { Units sold } & 2000 \text { units } & 600 \text { units } \
\hline \text { Sales price per unit } & \$ 700 & \$ 1200 \
\hline \text { Variable manufacturing cost per unit } & 310 & 650 \
\hline \text { Sales commission (\% of sales) } & 5 \% & 3 \% \
\hline
\end{array}$$ Pathways has two sales representatives-Curtis Muller and Willow Brown.Each sales representative sold a total of 1300 units during the month of March.Curtis had a sales mix of 80% Resume Reader and 20% Cover Letter Cure.Willow had a sales mix of 60% Resume Reader and 40% Cover Letter Cure.Based on the above information,calculate Willow's total contribution to company profits.
A)$544,180
B)$590,200
C)$276,900
D)$267,280

Quizplus · Accepted Answer

Willow's total sales = 1300 unitsSales mix: 60% Resume Reader and 40% Cover Letter CureSo, Willow sold 60% * 1300 = 780 units of Resume Reader and 40% * 1300 = 520 units of Cover Letter CureContribution per unit of Resume Reader = Sales price per unit - Variable manufacturing cost per unit - Sales commission per unit= $700 - $310 - 5% * $700 = $315Contribution per unit of Cover Letter Cure = Sales price per unit - Variable manufacturing cost per unit - Sales commission per unit= $1200 - $650 - 3% * $1200 = $456Total contribution from Resume Reader = Contribution per unit * Number of units sold= $315 * 780 = $245,700Total contribution from Cover Letter Cure = Contribution per unit * Number of units sold= $456 * 520 = $237,120Total contribution from Willow = Total contribution from Resume Reader + Total contribution from Cover Letter Cure= $245,700 + $237,120 = $482,820Sales commission for Willow = 3% * (780 * $700 + 520 * $1200) = $57,360Willow's total contribution to company profits = Total contribution from Willow - Sales commission for Willow= $482,820 - $57,360 = $425,460Since Willow sold 1300 units, her contribution per unit is $425,460 / 1300 = $327.28Therefore, Willow's total contribution to company profits is 327.28 * 1300 = $425,460

Pathways Careers,Inc Pathways Has Two Sales Representatives-Curtis Muller and Willow Brown