Question

At a sales volume of 20,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $132,000.To the nearest whole dollar, what should be the total sales commissions at a sales volume of 18,400 units? (Assume that this sales volume is within the relevant range.)

Answer 1

Answer:

Sales commission = $121440

Explanation:

given data

sales volume = 20,000 units

total sales commissions = $132,000

to find out

total sales commissions at a sales volume of 18,400 units

solution

first we get here Variable cost per unit that is

Variable cost per unit = $\frac{total\ sales\ commissions}{sales\ volume}$   ................1

Variable cost per unit = $\frac{132000}{20000}$

Variable cost per unit = $6.6 per unit

so Sales commission  will be

Sales commission = sales volume  × Variable cost per unit   ............2

Sales commission = $6.6 × 18,400

Sales commission = $121440