AI Excellent manufactures computer graphics hardware. The company sells its product through a network of sales agents. The agents are currently paid a 10% commission on sales. The following table shows the financial results of Al Excellent's operations for 2020: RM1,200,000 Sales revenue Less: Cost of goods sold Variable Fixed Gross profit Less: Operating costs Sales commissions Fixed administrative costs Operating income 420,000 180,000 600,000 120,000 300,000 RM180,000 Sales volume 2,000 units For the upcoming year, the sales agents are proposing a 5% increase in their commission. The president of Al Excellent is very unhappy with the proposal, "We are barely making a profit! Should we hire our own salespersons then?" The president has asked the accountant to gather information on the costs associated with hiring own salespersons in place of the sales agents. The accountant estimates that the company needs to hire 8 salespersons to cover the market area, and a sales manager to coach the salespersons. The company also needs to incur advertising cost if the salespersons are hired. The estimated costs associated with the new plan follow: Monthly salary Salesperson Sales manager Annual advertising cost RM1,200 per salesperson RM4,000 RM19,800 b. Suppose the company accepts and pays 15% commission to sales agents. Without showing any computation, would the company gain a profit or incur a loss if 1,800 units of computer graphics hardware is sold in the upcoming year? Explain. (2 marks) c. Suppose the company hires its own salespersons. Calculate the sales revenue needed to earn a target operating income of RM250,000. (3 marks) 3