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Blossom Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 21% of sales.
Blossom Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 21% of sales. The income statement for the year ending December 31, 2025, is as follows. BLOSSOM BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2025 Sales $70,800,000 Cost of goods sold Variable $29,028,000 Fixed 8.840,000 37,868,000 Gross profit $32,932,000 Selling and marketing expenses Commissions $14,868,000 Fixed costs 10,570,400 25,438.400 Operating income $7,493,600 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 fixed costs of $8,496,000.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 2025. Break-even point $ 51080000 eTextbook and Media Attempts: 1 of 2 used (b) Your answer is correct. Calculate the company's break-even point in sales dollars for the year 2025 if it hires its own sales force to replace the network of agents. Break-even point 55812800 eTextbook and MediaYour answer is correct. Calculate the degree of operating leverage at sales of $70,800,000 if (1) Blossom Beauty uses sales agents, and (2) Blossom Beauty employs its own sales staff. (Round answers to 2 decimal places, e.g. 1.25.) Degree of operating leverage (1) Blossom Beauty uses sales agents 3.59 (2) Blossom Beauty employs its own sales staff 4.72 eTextbook and Media Attempts: 2 of 2 used (d) Calculate the estimated sales volume in sales dollars that would generate an identical net income for the year ending December 31, 2025, regardless of whether Blossom Beauty Corporation employs its own sales staff and pays them an 9% commission or continues to use the independent network of agents. (Hint: Set up an equation, with the net income formula employing independent agents as one side of the equation and the net income formula employing the company's own sales staff as the other side of the equation. Before solving, eliminate those aspects that are the same on each side of the equation as they do not vary under the two alternatives.) Estimated sales volume $
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