I need help with C1

Cullumber 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, 2022, is as follows.

CULLUMBER BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2022
Sales				$74,800,000
Cost of goods sold
Variable		$29,920,000
Fixed		8,830,000		38,750,000
Gross profit				$36,050,000
Selling and marketing expenses
Commissions		$14,212,000
Fixed costs		10,333,400		24,545,400
Operating income				$11,504,600

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 $6,732,000.

(a)

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Your answer is correct.

Under the current policy of using a network of sales agents, calculate the Cullumber Beauty Corporations break-even point in sales dollars for the year 2022.

Break-even point

$enter the breakeven point in dollars

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Attempts: 1 of 2 used

(b)

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Your answer is correct.

Calculate the companys break-even point in sales dollars for the year 2022 if it hires its own sales force to replace the network of agents.

Break-even point

$enter the breakeven point in dollars

eTextbook and Media

Attempts: 1 of 2 used

(c1)

Calculate the degree of operating leverage at sales of $74,800,000 if (1) Cullumber Beauty uses sales agents, and (2) Cullumber Beauty employs its own sales staff. (Round answers to 2 decimal places, e.g. 1.25.)

				Degree of operating leverage
(1)		Cullumber Beauty uses sales agents		enter a value rounded to 2 decimal places
(2)		Cullumber Beauty employs its own sales staff		enter a value rounded to 2 decimal places