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Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales.
Bonita 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. BONITA BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2020 Sales $73.900,000 Cost of goods sold Variable $31.777,000 Fixed 8,910,000 40,687,000 Gross margin $33.213.000 Selling and marketing expenses Commissions $13,302,000 Fixed costs 10,937,100 24.239.100 Operating income $8.973,900 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 $8,129,000. (a) Your answer is correct. Under the current policy of using a network of sales agents, calculate the Bonita Beauty Corporation's break-even point in sales dollars for the year 2020. Break-even point $ 50890000 X Your answer is incorrect. Calculate the company's break-even point in sales dollars for the year 2020 if it hires its own sales force to replace the network of agents. Break-even point $C $8283541
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