Bob Brown Ltd (\"BB\") is a merchandising company that is the sole distributor a product that is increasing p0pular among Singaporean consumers. BB's income statement for the last year, 20x2 follow: ($'000) ($'000) Sales 5,000 Cost of goods sold (all variable) 1,240 Gross profit 3,760 Selling, general and administrative expenses Salaries and commissions 1,400 Shipping expense 120 Advertising expense 500 Insurance expense 10 Depreciation 106 Fixed general and administrative expenses 350 2,486 Prot before interest and taxes 1,274 Fixed interest expense 144 Prot before taxes 1,130 Tax expense 113' Prot after tax 1,017 Due to the war in Ukraine, shipping rates and insurance is projected to increase by 15% and 20% respectively in the coming year. BB relies on advertising to maintain its market share and expects advertising expense to increase by 50% from 20x2 levels. Salaries and commissions include variable sales commission of $400,000 paid to sales staff in 20x2. Sales commission rates will increase by 20% in the coming year and 5% each year after. Recently, BB has been facing stiff competition from e-commerce sites selling similar products. Although BB has managed to maintain its sales for now, younger customers appear to like shopping via e~commerce systems. BB is considering a new e-connnerce sales platform that can reduce its reliance on sales staff. The systems will cost a one-time payment of $400,000 and yearly fees of $20,000 starting in the coming year. Sales will maintain at 20x2 levels for the next 3 years, regardless of whether the system is used or not. If BB uses the system, sales staff salaries commissions will be eliminated. Several current sales staff will perform an admin role and the others let go. The salaries of staff let go amounts to $250,000 in 20x2. All other salaries remains the same. The CEO of BB, Robert, thinks using the new system will allow BB to maintain its current level of prots since the cost of the system is exactly the same as the amount of sales commission paid in 20x2. He has instructed the financial controller to work out some analysis for the proposal quickly, so he can present to the Board for approval next month. Required: (a) Apply costvolumeprot analysis to compute the breakeven point (in sales dollars) for the year 20x3 under the following scenarios: (i) Using sales staff. (ii) Using e-connnerce system (b) If BB continues use its sales staff to sell its product and pays sales commission, compute the estimated sales dollars (rounded to nearest dollar) that would be required to generate the same level of prot before tax as 20x2. (c) Compute the sales (in nearest dollar) for net income before taxes at which point BB will be indifferent between whether it sells through the ecommerce system or using its sales staff. Explain what your computations tell you. (d) Compute the degree of operating leverage that BB would expect to have in 20x3 the following scenarios: (j) Using sales staff. (ii) Using ecommerce system. Use operating income before taxes in the above computation. Round your answers to 2 decimal places. (e) Using your computations from parts (a) to ((1), provide a recommendation, with appropriate explanations, on why BB should/should not use the ecommerce system