Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople....

70.2K

Verified Solution

Question

Accounting

image
image
Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currenty, each of its five salespeople earns a 8% commission on the units they sell for $100 each, plus a fixed salary 40100 per person. Glade hopes that by increasing commissions to 13% and decreasing each salesperson's salary to $20,300, sales will increase because salespeople will be more motivated. Currently, sales are 20,000 units. Glade's other fixed costs, NOT including the salespeople's salaries, total $599,000. Glade's other variable costs, NOT including commissions, total $14 per unit. a. What is the current profit? b. What is the current break-even point in units? (Round your answer to the nearest whole number.) ven units c. What would the break-even point in units be if commissions are increased and salaries decreased? (Round your answer to the nearest whole number.) Seak-Even Point. 1 units d. If sales increase by 5,000 units, what will profit be under the new plan? Profit Under the New Plan

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students