MM Co. predicts sales of $45,000 for May. MM Co. pays a sales manager a monthly salary of $4,100 plus a commission of 6% of sales dollars. MM’s production manager recently found a way to reduce the amount of packaging MM uses. As a result, MM’s product will receive better placement on store shelves and thus May sales are predicted to increase by 7%. In addition, MM’s shipping costs are predicted to decrease from 4% of sales to 2% of sales.
Compute (1) budgeted sales and (2) budgeted selling expenses for May assuming MM switches to this more sustainable packaging.
Please show how to work the problem.