Amount is fixed salaries, The firm has normal monthly fixed

Amount is fixed salaries

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Reference no: EM13915894

Cost Behavior and Breakeven Analysis.

COMM Company sells clothing for young adults. The firm has normal monthly fixed costs of $90,000 ($38,000 of this amount is fixed salaries). The firm's variable cost ratio averages 60%. The firm operates 3 stores in the mid-Atlantic region.

1. From the employees' perspective, what level of monthly sales dollars must COMM achieve so that their monthly compensation under the combination fixed salary/commission model is equal to the current monthly fixed salary amount (currently $38,000).

2. Prepare commentary (about 1/2 page) that reviews / evaluates the pros and cons of making the proposed compensation structure change. I'm looking for a well-rounded response that reflects upon changes in breakeven point, likely impact on employee morale / motivation, MSM operating profit at different sales levels, etc.

Reference no: EM13915894

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