The Value of Bonuses Oscar's Outdoor Signage employs salesmen to find new advertisers for existing signs. In an average month, salaried sales staff can keep 80 of 100 signs under contract in a given month. When Oscar experimented with a bonus of $100
for each sign under contract this was increased to 90 of 100 signs. How large must the contribution margin on a sign be to make it profitable to offer the bonuses?
Oscar paid $100×90= $9,000 in bonuses to a sales staff member and increased the number under contract by 10 . This, comes to $9,000/10 = $900 per additional sign under contract. These bonuses are profitable if the contribution margin on a sign exceeds $900 per month.
You might also like to view...
Cyclical unemployment
A) decreases during a recession. B) is higher during an expansion. C) is always a constant amount of unemployment. D) fluctuates over the business cycle. E) fluctuates but not in response to the business cycle. Consider the following people: ? Chris quits his job as an automobile mechanic to pursue his college education full-time. ? Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ? Rita graduated from college and is currently looking for a job. ? Armondo quit his old job and will begin his new job in four days. ? Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ? Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser.
The term "currency drain" refers to an increase in currency held outside banks
Indicate whether the statement is true or false
A cold winter will increase the quantity of heating fuel demanded at every price
a. True b. False Indicate whether the statement is true or false
To deal with the time inconsistency problem associated with monetary policy, some have suggested that
A) the head of the central bank be chosen by election. B) the central bank implement expansionary monetary policy prior to election years. C) elected officials should have a direct influence on the implementation of monetary policy. D) all of the above E) none of the above