This question is to be considered independently of all other questions relating to Boenisch Corporation. Refer to the original data when answering this question.

-The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $16 per unit. In exchange, the sales staff would accept a decrease in their salaries of $102,000 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 700 units. What should be the overall effect on the company's monthly net operating income of this change?
A)decrease of $193,600
B)increase of $554,400
C)increase of $90,800
D)increase of $10,400

Question

This question is to be considered independently of all other questions relating to Boenisch Corporation. Refer to the original data when answering this question.

-The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $16 per unit. In exchange, the sales staff would accept a decrease in their salaries of $102,000 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 700 units. What should be the overall effect on the company's monthly net operating income of this change?
A)decrease of $193,600
B)increase of $554,400
C)increase of $90,800
D)increase of $10,400

Quizplus · Accepted Answer

The increase in sales revenue from 700 additional units will be offset by the $16 commission per unit and the $102,000 savings in salaries, resulting in a net increase of $10,400 in monthly net operating income.

This Question Is to Be Considered Independently of All Other