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) Company X manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission at a percent of
Company X manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a
commission at a percent of sales basis. Partial income statement for the last two years is as follows:
Beginning of the company is considering hiring its own sales staff to replace the network of agents. It will pay its
salespeople a commission of and incur additional fixed costs of TL
Q Calculate the degree of operating leverage at sales TL if the company uses sales agents.
Q Assume the company employs its own sales staff. Calculate the change in net income in TL if sales decrease by
Q Calculate the estimated sales volume in TL that would generate an identical net income for the year ending
December regardless of whether the company uses sales agents or employs its own sales staff.
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