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ACC 511- The fixed costs of Chun Company are $309,000 and the total variable costs

The fixed costs of Chun Company are $309,000 and the total variable costs for its only product are 45% of the sales price, which is $100. Chun currently sells 7,400 units per month and is looking to sell more. Consider each of the following independently:Part AThe marketing manager is considering lowering base salaries of salespeople by a collective amount of $39,000 per month while increasing the sales commission by $8 per unit. He believes this will increase monthly sales by 130 units. If so, what would the effect of this change in compensation have on monthly income? AnswerIncreaseDecrease of $Answer.Part BManagement believes monthly sales can be increased by 570 units if additional quality control steps are taken. These steps would mean an increased variable cost per unit of $10. What is the expected effect on the company’s monthly income of adding these additional quality control steps? AnswerDecrease by $48,350Decrease by $54,050Increase by $25,650Decrease by $48,892Part CThe marketing manager thinks sales are too low in St. Kitts and Nevis and suggests that sales there would be increased by 120 units per month if an additional $9,000 per month was spent advertising there. What should be the effect on monthly income if this additional advertising is done? AnswerDecrease by $2,400Decrease by $4,975Increase by $404,600Increase by $329,400

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