This question is to be considered independently of all other questions relating to Thornbrough Corporation.Refer to the original data when answering this question. The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $11 per unit.In exchange, the sales staff would accept a decrease in their salaries of $65,000 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 300 units.What should be the overall effect on the company's monthly net operating income of this change?

A) increase of $1,269,500
B) increase of $37,500
C) increase of $61,700
D) decrease of $92,500

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Alizeh Blythe · Accepted Answer

Final Answer : B, Explanation :    Overall net operating income will increase by $37,500Reference: CHO6-Ref22Heathman Inc.produces and sells a single product.The selling price of the product is $230.00 per unit and its variable cost is $89.70 per unit.The fixed expense is $308,660 per month.

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