2. Cost-Volume-Profit: 15 marks Morrison manufactures telecommunications equipment. The company has always been production-oriented and sells its products through agents. Agents are paid a commission of 15% of the selling price. Morrison's budgeted statement of financial performance for product 845 is as follows: Morrison Product B45 Budgeted Income Statement For the month ending June 30, 2019 Sales (sales volume: 100) Manufacturing costs: $26,000 7,800 - Variable - Fixed overhead 2100 10.900 15,100 Gross margin Selling and administrative expenses -Commissions (15% of selling price) Fixed administrative 3,900 7.950 $7.150 Net Profit After the profit plan was completed, Morrison's sales agents demanded that the commission be increased to 20% of the selling price, Mike Mars, the company's managing director thought that this demand was outrageous and he asked Gwyneth Hillson, a manager with some prior marketing experience, to estimate the cost to Morrison of employing its own sales force Hillson's estimate of the additional monthly costs, exclusive of commission, are as follows: Sales personnel would receive a commission of 10% of the selling price in addition to their salary; * .Estimated monthly fixed cost of Employing a Company Sales Force for Product B45. Fixed Salaries 1,800 Fixed marketing costs 410 Total 2,210 (a) Calculate the estimated break-even point in sales dollars for Product B45 for the month of June 2019 if Morrison employs its own sales force. Please show all working (b) If Morrison continues to sell through agents and pays the increased commission of 20% of selling price, determine break-even point in sales dollars: and the estimated sales dollars for June 2019 that would generate the same net profit ($7,150) as projected in the budgeted income statement for Product B45. Please show all working (c) Determine the estimated sales dollars that would generate the same amount of net profit for June 2019 for the option of either (1) continuing to sell through agents and pay a commission of 20% of selling price or (2) employing its own sales force. Please show all working (d) Discuss whether Morrison should continue to sell through agents and pay a commission of 20% of the selling price or employ its own sales force. what would you recommend and why? (e) One of the managers stated "Cost-volume-profit analysis is useful because it is so accurate." Comment on this statement