Crane Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a

commission of $19\%$ of sales. The income statement for the year ending December $31,2025,$ is as follows.

CRANE BEAUTY CORPORATION

Income Statement

For the Year Ended December $31,2025$

Cost of goods sold

The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of $10\%$

and incur additional fixed costs of $$6,444,000.$

Your answer is correct.

Under the current policy of using a network of sales agents, calculate the Crane Beauty Corporation's break$-$even point in sales

dollars for the year $2025.$

Break$-$even point $

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Calculate the company's break$-$even point in sales dollars for the year $2025$ if it hires its own sales force to replace the network of

agents.

Break$-$even point $

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$($c$1)$

Calculate the degree of operating leverage at sales of $$71,600,000$ if $(1)$ Crane Beauty uses sales agents, and $(2)$ Crane Beauty

employs its own sales staff. $($Round answers to $2$ decimal places, e$.$g$.1\mathrm{.}25.)$

Degree of operating leverage

$(1)$ Crane Beauty uses sales agents

$(2)$ Crane Beauty employs its own sales staff