Homework Answers
Expected Sales commission = 40 * 10 / 100 = $4
Actual sales commission = 38 * 10 / 100 = $3.8
Contribution = Net sales revenue - (variable production cost + Sales Commission)
Due to competition the company reduced the sales price and at the same time variable cost is increased so the company contribution margin was reduced as compared to actual with the Expected. So the Actual net income of the company also will be low as compared to the Expected Net Income.
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