Homework answers / question archive /   Data concerning Hill Corporation's single product appear below:   Per Unit Percent of Sales   Selling price $ 130     100 % Variable expenses   26     20 % Contribution margin $ 104     80 %                 Fixed expenses are $456,000 per month

  Data concerning Hill Corporation's single product appear below:   Per Unit Percent of Sales   Selling price $ 130     100 % Variable expenses   26     20 % Contribution margin $ 104     80 %                 Fixed expenses are $456,000 per month

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Data concerning Hill Corporation's single product appear below:

Fixed expenses are $456,000 per month. The company is currently selling 5,000 units per month.

Required:

The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $10 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $53,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 90 units. What should be the overall effect on the company's monthly net operating income of this change?