Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of18% 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$74,800,000Cost of goods sold

Variable$31,416,000

Fixed8,970,00040,386,000

Gross margin$34,414,000

Selling and marketing expenses

Commissions$13,464,000

Fixed costs10,790,00024,254,000

Operating income$10,160,000

The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of7% and incur additional fixed costs of $8,228,000.

1.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 2017.(Round intermediate calculations to 2 decimal places e.g. 10.25 and final answers to 0 decimal places, e.g. 2,510.)

2.Calculate the company's break-even point in sales dollars for the year 2017 if it hires its own sales force to replace the network of agents.(Round intermediate calculations to 2 decimal places e.g. 10.25 and final answers to 0 decimal places, e.g. 2,510.)