Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 20% of sales.
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 20% 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 $ 79.500.000 Cost of goods sold Variable $ 33,390,000 Fixed 8,670,000 42.060.000 Gross margin $ 37,440.000 Selling and marketing expenses Commissions $ 15,900.000 Fixed costs 10,159,000 26.059.000 Operating income $ 11.381.000 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 $ 9.540,000. (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 $ 49550000 e Textbook and Media Attempts: 1 of 5 used (b) 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 $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started