Glade, Inc. is trying to decide whether to increase thecommission-based pay of its salespeople. Currently, each of itsfive salespeople earns a 12% commission on the units they sell for$100 each, plus a fixed salary of $41,100 per person. Glade hopesthat by increasing commissions to 17% and decreasing eachsalesperson’s salary to $21,700, sales will increase becausesalespeople will be more motivated. Currently, sales are 17,000units. Glade’s other fixed costs, NOT including the salespeople’ssalaries, total $595,000. Glade’s other variable costs, NOTincluding commissions, total $16 per unit.  

a. What is the current profit?

Current Profit

?

b. What is the current break-even point in units?(Round your answer to the nearest wholenumber.)

Break-Even Point

? unit

  

c. What would the break-even point in units be ifcommissions are increased and salaries decreased? (Roundyour answer to the nearest whole number.)

Break-Even Point

? unit

d. If sales increase by 9,000 units, what willprofit be under the new plan?

Profit under the new plan

?

e. At what sales level would Glade be indifferentbetween the lower-commission plan and the higher-commissionplan?

Point of Indifference

? unit

Juniper Enterprises sells handmade clocks. Its variable cost perclock is $6.80, and each clock sells for $17.00. The company’sfixed costs total $7,446.    

How many units must Juniper sell to earn a profit of at least$6,834?

Sales

? units