Colen Corporation produces and sells a single product. In January, the company sold 1,700 units. Its total sales were $153,000, its total variable expenses were $79,900, and its total fixed expenses were $56,800. Required: a. Construct the company's contribution format income statement for January in good form. Net operating income $ b. Redo the company's contribution format income statement assuming that the company sells 1,600 units.
Data concerning Tietz Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 180 100% Variable expenses 36 20% Contribution margin $ 144 80% Fixed expenses are $1,044,000 per month. The company is currently selling 9,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $14 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $110,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 400 units. Required: What should be the overall effect on the company's monthly net operating income of this change?