Variable expenses per unit: Direct Material $20 Direct Labour $50 Variable Manufacturing Overhead $10 Fixed expenses: Fixed Manufacturing Overhead $125,000 Fixed Selling Costs $75,000 Fixed Administrative Costs $100,000 selling price per unit  200  operating income 420000 the business is considering paying a commission to its sales team as part of the sales expansion effort, which should result in an increase in sales revenue. The head of the marketing department has indicated that the effort of the sales team should result in a 15% increase in sales volume.   Calculate the new break-even sales figure, 2) the new margin of safety and 3) the new operating profit, to determine whether the new sales commission plan is indeed viable.

Question

Variable expenses per unit: Direct Material $20
Direct Labour $50
Variable Manufacturing Overhead $10
Fixed expenses: Fixed Manufacturing Overhead $125,000
Fixed Selling Costs $75,000
Fixed Administrative Costs $100,000

selling price per unit  200
 operating income 420000


the business is considering paying a commission to its sales team as part of the sales expansion effort, which should result in an increase in sales revenue. The head of the marketing department has indicated that the
effort of the sales team should result in a 15% increase in sales volume. 
 Calculate the new break-even sales figure, 2) the new
margin of safety and 3) the new operating profit, to determine whether the new sales commission plan is
indeed viable.

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