Posted: June 15th, 2022

West Virginia State University B A 215 Monterey Co. makes and sells a single product

11. Monterey Co. makes and sells a single product. The current selling price is $17 per unit. Variable expenses are $10.2 per unit, and fixed expenses total $33,680 per month. (Unless otherwise stated, consider each requirement separately.)Management is considering a change in the sales force compensation plan. Currently each of the firm’s two salespeople is paid a salary of $2,500 per month. g.1Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.75 per unit, assuming a sales volume of 5,100 units per month. (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.) _________________________ __________________________ g.2Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.75 per unit, assuming a sales volume of 6,200 units per month. (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)_________________________ __________________________ h.1Assuming that the sales volume of 6,200 units per month achieved in part g could also be achieved by increasing advertising by $1,000 per month instead of changing the sales force compensation plan. What would be the operating income or loss? (Do not round your intermediate calculations.)_________________________ __________________________ h.2Which strategy would you recommend?______Plan to change the sales force compensation.______Plan to increase advertising expenses.

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