Question

1. A Soup company is considering to hire new sales people to increase profitability. The company...

1. A Soup company is considering to hire new sales people to increase profitability. The company currently has 100 sales reps and achieve they $1,000 million sales. The gross margin is 10%. The compensation cost of each sales rep is $0.2 million. The following table shows how much sales an additional sales rep can bring in if the company hire more sales reps.

Please help the company:

(1) make the decision on how many new sales rep they should hire to achieve the maximum level of profitability

(2) calculate the maximum level of profitability

Please show calculation process

addition of sales rep sales brought in
1 10 million
2 6 million
3 3 million
4 1 million
5 .5 million
6 0 million
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Golf Clubs 'n Balls is a $16 million company with 1 president and the following number...
Golf Clubs 'n Balls is a $16 million company with 1 president and the following number of sales reps in these two territories: -Eastern U.S. ($12 million in sales, 11 reps) -Western U.S. ($4 million in sales, 6 reps) The company sells two types of products (and each rep sells both products): -Golf clubs ($10 million in sales) and -Golf balls ($6 million in sales). And you can assume that the following list contains information on all other costs for...
Company XYZ is considering outsourcing their Product A. Facts: 1) Product A makes up 30% of...
Company XYZ is considering outsourcing their Product A. Facts: 1) Product A makes up 30% of a companies sales revenue and production volume 2) By reducing sales price 5%, can increase unit sales volume by 15% 3) Product A sales were $27 million last year 4) Direct material costs for Product A were $14.3 million and overhead costs were $4.2 million 5) If product is outsourced, only $2.9 million overhead will be avoided 6) Direct selling costs are 8% commission...
A company is considering the purchase of a new machine that will enable it to increase...
A company is considering the purchase of a new machine that will enable it to increase its expected sales. The machine will have a price of $100,000. In addition, the machine must be installed and tested. The costs of installation and testing will amount to $10,000. The machine will be depreciated using 3-years MACRS. (Use MACRS table from class excel exercise by copying the table and pasting it) The equipment will be operated for 5 years. The sales in the...
1 Last year a company reported sales of $ 10 million and an inventory turnover ratio...
1 Last year a company reported sales of $ 10 million and an inventory turnover ratio of 5. It is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 8 while maintaining the same level of sales, how much cash will be freed up? 2 A company has days sales outstanding of 18 days. It averages $ 6,500 in credit sales every day....
Your company is considering a new project, and you have the following information: Two years ago,...
Your company is considering a new project, and you have the following information: Two years ago, the company paid $1,000,000 for the land and building that will house the project. The property could be sold for $3,000,000 today. Its book value is the purchase price. One year ago, the firm spent $100,000 on initial marketing for the project. The project requires the purchase of a machine (in year 0) for $500,000. The machine will be fully depreciated straight-line in years...
John’s Barley Mill is considering adding a new production line to its existing facility. The new...
John’s Barley Mill is considering adding a new production line to its existing facility. The new production line will increase John’s sales revenue by $1 million/year. Sales of this offering have a gross margin of 70% and the cost of operating the new line is another 50% of sales on an annual basis. The company does not have any excess capital to invest in this project beyond what they acquire through the debt/equity associated with this project. The new production...
Option 1 Hire a large group of micro-influencers (<10k followers) to promote your new line on...
Option 1 Hire a large group of micro-influencers (<10k followers) to promote your new line on instagram. You will pay your micro-influencers an average of €1000 each in a given year. You expect each micro influencers to generate €2,000 in cash flow from sales. The number of micro-influencers in your program will be as follows: • Year 1 - 120 micro influencers • Year 2 - Increase to 175 micro influencers total • Year 3 - Increase to 275 micro...
1. For the coming month your company estimates sales to be $100,000 and then increase by...
1. For the coming month your company estimates sales to be $100,000 and then increase by 5% for two months more. Assume the beginning inventory for the coming month estimated to be $20,000 and the ending inventory 30% of cost of goods sold, cost of goods sold estimation is 60% of sales, what is the estimated purchases in dollars.Your answer should be in this form $12,311.21 and do not include formulas 2. Flexible budgeting use a. Several levels of activities...
Sea Water Ltd is wholesale supplier of seafoods based in Swakopmund. Recently the company has experienced...
Sea Water Ltd is wholesale supplier of seafoods based in Swakopmund. Recently the company has experienced a continuous decline in profitability. A new management team has been employed in an attempt to reverse the situation. One of the issues to be addressed is whether or not the company’s credit policy should be changed. At present the company’s credit terms 1/15, net 45. All sales at present and in future will be on credit and at present 20% of the customers...
1. (May, 1986) A company is considering the introduction of a new product. The marketing vice...
1. (May, 1986) A company is considering the introduction of a new product. The marketing vice president believes that the probability of success for the product is .5. It will either be a complete success or a complete failure. The product will be test marketed regionally before being introduced nationally. In the past, the test market has been 75% reliable in making favorable predictions - that is, if a product is destined to be successful nationally, the test market will...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT