Data concerning Ulwelling Corporation's single product appearbelow:
| Per Unit | | Percent of Sales |
| Selling price | $ | 160 | | | | 100 | % |
| Variable expenses | | 48 | | | | 30 | % |
| Contribution margin | $ | 112 | | | | 70 | % |
|
Fixed expenses are $1,054,000 per month. The company iscurrently selling 9,800 units per month.
The marketing manager would like to introduce sales commissionsas an incentive for the sales staff. The marketing manager hasproposed a commission of $8 per unit. In exchange, the sales staffwould accept an overall decrease in their salaries of $100,000 permonth. The marketing manager predicts that introducing this salesincentive would increase monthly sales by 500 units.
Required:
What should be the overall effect on the company's monthly netoperating income of this change? (Negative amount should beindicated by a minus sign.)
