3) Data concerning Bazin Corporation's single product appear below:
Percent of Sales
Fixed expenses are $384,000 per month. The company is currently selling 6,000 units per month. The marketing
manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager
has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries
of $46,000 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 500 units. What should be the overall
effect on the company's monthly net operating income of this change?
4) Sjostrom Corporation has provided the following contribution format income statement. Assume that the
following information is within the relevant range.
Sales (7,000 units)
Net operating income
If the selling price increases by $3 per unit and the sales volume decreases by 600 units, the net operating
income would be closest to:
5) Jilk Inc.'s contribution margin ratio is 58% and its fixed monthly expenses are $36,000. Assuming that the
fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a
month when sales are $103,000?