2 Case 5-32 (Algo) Cont Structure; Break Even and Target Profit Analysis (LOS 4. LOS-5, L056) Company growing recommcom Theory force.com t.com on edependents to match the 2 fo Pa Cam 2 Cose 5-32 (Algo) Cost Structure; Break-Even and Target Profit Analysis (LO5-4, LO-5, LOS-6) 10 Pittman Company is a small but growing manufacturer of telecommunication equipment. The company has no salesforce of its own rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 15% for all tems sold Barbara Cheney, Pitman's controller, has just prepared the company's budgeted Income statement for next year as follows oped car statement to the ended BAR Heracturing Variable 110.25.000 wered 3,115,00 3,179,00 107, Selling and interest Costa Wired intrative pe die operating in Find lateret expenses before its ISOR 3,032.100 2.15. 11 *Prunary depreciation on storage facilities As Barbara handed the statement to Karl Vecci Pirman's president, she commented. I went ahead and used me agents 15 Comissione in completing these statements, but we veteamed that they refuse to handle our products next year unless we increase the commission rate to 2016 That's the straw. Kart replied angry Those agents have been demanding more and more, and this time they ve gone tootan How can they possibly defend a 20% common rate "They cam that after paying for advertising, traves, and the other costs of promotion, there's nothing left over for profiteplied y just robbery rared Karl And who say it's time we dumped those guys and got our own salesforce. Can you get your people to work up some cost figuren for us to look at Wive already warned them used Barbara Several companies we know about pay a 75% commission to metown salespeople 2 "Werewdy worked them under several compus we know about 51.common to their own salespeegi along with a small salary. Of course, we would have to handle all promotion costs too we figure out foed expens wou by 2375.000 per year, but that would be more than offset by the 4500.000 (208522.500.000 that we wou vodon agents commons The breakdown of the 53.375.000 cost follows 10 Si Salim trand Serpendant Andred the $375.000 what were paying the genereld.com even better than that expand we can actually a 2500 a year's what we're pay our stort ch the report our openies would be of the numbers together and we how to the commodate the novel of the were on the matter wedly Required: Computer Company receptors for externe The agents considera un aged 155 The agents contesto 20 The company employs its own esforce 2. Assume that an Company desses to conting though agents and pay the 2018 core Detene med sales at would be required to meet con contain the bestment for next year Dere he does not come would be cool recies or whether Firman comes themah agents at 20 comentaris own salesforce Contenu degeteg leverage that are company witud expect to be the end of eat year song 15 The agert.com.co rates increased to 20% The company employs some force incore before comes in your operating leverage computation aela