User Account

All Pages

Show which plan would produce a larger percentage decrease

Assignment Help Financial Accounting
Reference no: EM132566272

SOP Enterprises is studying the addition of a new product that would have an expected selling price of RM180 and expected variable cost of RM120. Anticipated demand is 9,000 units.

A new salesperson must be hired because the company's current sales force is working at capacity. Two compensation plans are under consideration:

Plan 1: An annual salary of RM38,000 plus 10% commission based on gross sales dollars

Plan 2: An annual salary of RM180,000 and no commission

Required:

Question (a). Calculate the contribution margin and income of the two plans at 9,000 units.

Question (b) Compute the operating leverage factor of the two plans at 9,000 units. Which of the two plans is more highly leveraged? Why?

Question (c). Assume that a general economic downturn occurred during year 2, with product demand falling from 9,000 to 7,200 units. By using the operating leverage factors, determine and show which plan would produce a larger percentage decrease in income.

Reference no: EM132566272

Questions Cloud

What is the cost of the marginal cash discount : hat is the firm's marginal profit contribution from sales under the proposed plan of initiating the cash discount? What is cost of the marginal cash discount
Describe between academic and professional integrity : Nurse-scholars have a significant obligation to their community as well. Their work must have academic and professional integrity. Their efforts are designed.
Prepare the journal entries that readers corner would record : Prepare the journal entries that Readers' Corner would record and show any computations. (If no entry is required for a transaction/event)
Define the role of mentor : Define the role of a mentor. Provide a description of a mentor from your life and how you used teamwork to solve problems.
Show which plan would produce a larger percentage decrease : By using the operating leverage factors, determine and show which plan would produce a larger percentage decrease in income.
Decide to resell the equipment at that point in time : You just purchased some equipment that is classified as 5-year property for MACRS. The equipment cost $147,000. What will the book value of this equipment
Explain the current event or shift you selected : Our health care system changes frequently. In this assignment you will review our current health care system and how it has evolved in the past eight years.
Price elasticity of demand-brand loyalty : Is there a relationship between price elasticity of demand, brand loyalty, and product differentiation?
PUBH6005 Epidemiology Assignment : PUBH6005 Epidemiology Assignment Help and Solution, Laureate International Universities - Assessment Writing Service - Assess levels of evidence

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd