BE 19 7/7

Question 7 of 7 1.5/3 E Sheridan Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The income statement for the year ending December 31, 2020, is as follows Sales $79.700,000 Cost of goods sold Variable $32,677,000 Fixed 8,500,000 41,177,000 Gross margin $38,523,000 Selling and marketing expenses Commissions $14,346,000 Fixed costs 10,060,700 24406,700 Operating income $14,116,300 The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 9% and incur additional fed costs of $7.173,000 Question 7 of 7 1.5/3 = X Your answer is incorrect. Calculate the degree of operating leverage at sales of $79,700,000 if (1) Sheridan Beauty uses sales agents, and (2) Sheridan Beauty employs its own sales staff. (Round answers to 2 decimal places, e.g. 1.25.) Degree of operating leverage (1) Sheridan Beauty uses sales agents 255 (2) Sheridan Beauty employs its own sales staff