cortez enterprises is studying the addition of a new product that would have an expected selling price of $180 and expected variable cost of $120. anticipated demand is 9,000 units. a new salesperson must be hired because the company’s current sales force is working at capacity. two compensation plans are under consideration: plan 1: an annual salary of $38,000 plus 10% commission based on gross sales dollars. plan 2: an annual salary of $180,000 and no commission. required: 1. what is meant by the term “operating leverage”? 2. calculate the contribution margin and net income of the two plans at 9,000 units. 3. compute the operating leverage factor of the two plans at 9,000 units. which of the two plans is more highly leveraged? why?

Found something interesting ?

• On-time delivery guarantee
• PhD-level professional writers
• Free Plagiarism Report

• 100% money-back guarantee
• Absolute Privacy & Confidentiality
• High Quality custom-written papers

Related Model Questions

Feel free to peruse our college and university model questions. If any our our assignment tasks interests you, click to place your order. Every paper is written by our professional essay writers from scratch to avoid plagiarism. We guarantee highest quality of work besides delivering your paper on time.

Grab your Discount!

25% Coupon Code: SAVE25
get 25% !!