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 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. al 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 e Textbook and Media Assistance Used Attempts: 1 of 3 used Your answer is correct. 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 $ 55952200 e Textbook and Media Assistance Used Attempts: 2 of 3 used (c1) Calculate the degree of operating leverage at sales of $73,900,000 if (1) Bonita Beauty uses sales agents, and (2) Bonita Beauty employs its own sales staff. (Round answers to 2 decimal places, e.g. 1.25.) Degree of operating leverage (1) Bonita Beauty uses sales agents (2) Bonita Beauty employs its own sales staff e Textbook and Media Save for Later Attempts: 0 of 3 used Submit
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