C VP, shoe s t o r es. Refer to requirement 3 of Exercise 8….
C VP, shoe s t o r es.
Refer to requirement 3 of Exercise 8.24.
Required
1 Calculate the number of units sold where the operating profit under (a) a fixed-salary plan, and (b) a lower fixed-salary and commission plan (for salespeople only) would be equal. Above that number of units sold, one plan would be more profitable than the other; below that number of units sold, the reverse would occur.
2 Calculate the operating profit or loss under each plan in requirement 1 at sales levels of
(a) 50 000 units, and (b) 60 000 units.
3 Suppose the target operating profit is £168 000. How many units must be sold to reach the target under (a) the fixed-salary plan, and (b) the lower fixed-salary and commission plan?
