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A manufacturer is considering a switch from manufacturers representatives to an internal sales force. The following cost estimates are available. Manufacturers reps are paid 7.4%
A manufacturer is considering a switch from manufacturers representatives to an internal sales force. The following cost estimates are available. Manufacturers reps are paid 7.4% commission and incur $675,000 in fixed costs, while an internal sales force has fixed costs projected at $2,130,000 and would receive 2.5% commission. At what sales volume would the manufacturer be indifferent between the two alternatives? Report your answer in dollars.
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