Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

give me the answer and calculation process 2. Kindle, Inc. manufactures cosmetic products that are sold through a network of sales agents. The agents are

image text in transcribed

give me the answer and calculation process

2. Kindle, Inc. manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 12.5% of sales. The income statement for the year ending December 31, 2016, is as follow. KINDLE, INC Income Statement Year Ending December 31, 2016 Sales $130,000 Cost of goods sold Variable Fixed S58,500 57,150 Gross margin Selling and marketing expenses Commissions Fixed costs Operating income $16,250 17.100 33.350 $ 23,800 The company is considering hiring its own sales staff to replace the network of agents. It wil pay its salespeople a commission of 10% and incur additional fixed costs of $13 Instructions (a) Under the current policy of using a network of sales agents, calculate Kindle, Inc.'s break-even point in sales dollars for the year 2016. (b) Calculate the company's break-even point in sales dollars for the year 2016 if it hires its own sales force to replace the network of agents. (c) Calculate the degree of operating leverage at sales of $130 million if (1) Kindle, Inc. uses sales agents, and (2) Kindle, Inc. employs its own sales staff

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Barry Elliott, Jamie Elliott

11th Edition

0273708708, 9780273708704

More Books

Students also viewed these Accounting questions