Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 11% commission on the units they sell for $100 each, plus a fixed salary of $40,400 per person. Glade hopes that by increasing commissions to 16% and decreasing each salesperson's salary to $20,900, sales will increase because salespeople will be more motivated. Currently, sales are 17,000 units. Glade's other fixed costs, NOT including the salespeople's salaries, total $580,000. Glade's other variable costs, NOT including commissions, total $14 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 whole number.) Break-Even Point 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.) Break-Even Point units Profit Under the New Plan units d. If sales increase by 13,000 units, what will profit be under the new plan?

Glade, Inc. is trying to decide whether to increase the commission-based pay of its salespeople. Currently, each of its five salespeople earns a 11% commission on the units they sell for $100 each, plus a fixed salary of $40,400 per person. Glade hopes that by increasing commissions to 16% and decreasing each salesperson's salary to $20,900, sales will increase because salespeople will be more motivated. Currently, sales are 17,000 units. Glade's other fixed costs, NOT including the salespeople's salaries, total $580,000. Glade's other variable costs, NOT including commissions, total $14 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 whole number.) Break-Even Point 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.) Break-Even Point units Profit Under the New Plan units d. If sales increase by 13,000 units, what will profit be under the new plan?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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