Blossom 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 $31,2027,$ is as follows.

The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of $7\%$

and incur additional fixed costs of $$8,228,000.$

Your answer is correct.

Under the current policy of using a network of sales agents, calculate the Blossom Beauty Corporation's break$-$even point in sales

dollars for the year $2027.$

Break$-$even point $$50,670,000$

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Your answer is correct.

Calculate the company's break$-$even point in sales dollars for the year $2027$ if it hires its own sales force to replace the network of

agents.

Break$-$even point $,$$

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Your answer is incorrect.

Calculate the degree of operating leverage at sales of $$74,800,000$ if $(1)$ Blossom Beauty uses sales agents, and $(2)$ Blossom

Beauty employs its own sales staff. $($Round answers to $2$ decimal places, e$.$g$.1\mathrm{.}25.)$

Degree of operating leverage

$(1)$ Blossom Beauty uses sales agents

$(2)$ Blossom Beauty employs its own sales staff

Your answer is incorrect.

Calculate the sales dollars that would generate an identical net income for the year ending December $31,2027,$ regardless of

whether Blossom Beauty Corporation employs its own sales staff and pays them an $7\%$ commission or continues to use the

independent network of agents.