Question
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 21% of sales.
Bonita 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, 2017, is as follows. BONITA BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2017 Sales $78,300,000 Cost of goods sold Variable $38,367,000 Fixed 8,790,000 47,157,000 Gross margin $31,143,000 Selling and marketing expenses Commissions $16,443,000 Fixed costs 10,520,000 26,963,000 Operating income $4,180,000 The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8% and incur additional fixed costs of $10,179,000. Collapse question part (a) Under the current policy of using a network of sales agents, calculate the Bonita Beauty Corporations break-even point in sales dollars for the year 2017. (Round intermediate calculations to 2 decimal places e.g. 10.25 and final answers to 0 decimal places, e.g. 2,510.) Break-even point $ LINK TO TEXT LINK TO TEXT
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