Glade, Inc. is trying to decide whether to increase thecommission-based pay of its salespeople. Currently, each of itsfive salespeople earns a 12% commission on the units they sell for$100 each, plus a fixed salary of $41,100 per person. Glade hopesthat by increasing commissions to 17% and decreasing eachsalesperson’s salary to $21,700, sales will increase becausesalespeople will be more motivated. Currently, sales are 17,000units. Glade’s other fixed costs, NOT including the salespeople’ssalaries, total $595,000. Glade’s other variable costs, NOTincluding commissions, total $16 per unit. Â
a. What is the current profit?
b. What is the current break-even point in units?(Round your answer to the nearest wholenumber.)
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c. What would the break-even point in units be ifcommissions are increased and salaries decreased? (Roundyour answer to the nearest whole number.)
d. If sales increase by 9,000 units, what willprofit be under the new plan?
| Profit under the new plan | ? |
e. At what sales level would Glade be indifferentbetween the lower-commission plan and the higher-commissionplan?
| Point of Indifference | ? unit |
Juniper Enterprises sells handmade clocks. Its variable cost perclock is $6.80, and each clock sells for $17.00. The company’sfixed costs total $7,446.   Â
How many units must Juniper sell to earn a profit of at least$6,834?
