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Metz Corporation manufactures housewares products that are sold through a network of external sales agents. The agents are paid a commission of 20% of revenues.

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Metz Corporation manufactures housewares products that are sold through a network of external sales agents. The agents are paid a commission of 20% of revenues. Metz is considering replacing the sales agents with its own salespeople, who would be paid a commission of 10% of revenues and total salaries of $2,200,000. The income statement for the year ending December 31, 2017, under the two scenarios is shown here. : (Click the icon to view the income statements.) Read the requirements. Requirement 1. Calculate Metz's 2017 contribution margin percentage, breakeven revenues, and degree of operating leverage under the two scenarios. Begin by calculating Metz's 2017 contribution margin percentage. Determine the formula, then enter the amounts to calculate the percentage. (Round the percentage to the nearest whole percent.) Contribution % Contribution margin 7,480,000 margin 34 $ $ Revenues 22,000,000 22,000,000 Using Sales Agents Using Own Sales Force % $ 9,680,000 44 % Calculate Metz's 2017 breakeven point in revenues. Begin by determining the formula, then enter the amounts to calculate the breakeven points. (Enter applicable percentages as as percentage rounded to the nearest whole percent. Round your answer up to the nearest whole dollar.) Breakeven Fixed costs Contribution margin percent revenues Using Sales Agents $ 5,746,000 34 % = $ 16,900,000 Using Own Sales Force $ 7,946,000 44 % = $ 18,059,091 = Calculate Metz's 2017 operating leverage. (Round your answer to two decimal places.) Operating Contribution margin leverage $ + $ Using Sales Agents Using Own Sales Force 4.31 Operating income 1,734,000 1,734,000 7,480,000 9,680,000 $ 5.58 noong from anu lint or or number in the insufield and then clickbooks AOC Read the requirements. . Revenues % margin 34 $ Contribution margin 7,480,000 9,680,000 $ 22,000,000 Using Sales Agents Using Own Sales Force % $ + $ 22,000,000 44 % Calculate Metz's 2017 breakeven point in revenues. Begin by determining the formula, then enter the amounts to calculate the breakeven points. (Enter applicable percentages as as percentage rounded to the nearest whole percent. Round your answer up to the nearest whole dollar.) Breakeven Fixed costs + Contribution margin percent revenues $ 5,746,000 34 % Using Sales Agents Using Own Sales Force = $ 16,900,000 $ 18,059,091 $ 7,946,000 44 % Calculate Metz's 2017 operating leverage. (Round your answer to two decimal places.) + Operating leverage 4.31 + Contribution margin Operating income Using Sales Agents $ 7,480,000 $ 1,734,000 Using Own Sales Force $ 9,680,000 $ 1,734,000 Requirement 2. Describe the advantages and disadvantages of each type of sales alternative. 5.58 The calculations indicate that at sales of $22,000,000, a percentage change in sales and contribution margin will result in times that percentage in if Metz continues to use sales agents and that percentage change in if Metz employs its own sales staff. times hoose from any list or enter any number in the input fields and then click Check Answer. 16 - Calculate Metz's 2017 operating leverage. (Round your answer to two decimal places.) Operating income 1,734,000 1,734,000 Operating leverage 4.31 5.58 Contribution margin Using Sales Agents $ 7,480,000 Using Own Sales Force $ Requirement 2. Describe the advan contribution margin net income The calculations indicate that at sale operating income in times that percentage ir variable expenses that percentage change in of sales alternative. in sales and contribution margin will result if Metz continues to use sales agents and if Metz employs its own sales staff. times Choose from any list or enter any number in the input fields and then click Check Answer. Metz Corporation manufactures housewares products that are sold through a network of external sales agents. The agents are paid a commission of 20% of revenues. Metz is considering replacing the sales agents with its own salespeople, who would be paid a commission of 10% of revenues and total salaries of $2,200,000. The income statement for the year ending December 31, 2017, under the two scenarios is shown here. : (Click the icon to view the income statements.) Read the requirements. Requirement 1. Calculate Metz's 2017 contribution margin percentage, breakeven revenues, and degree of operating leverage under the two scenarios. Begin by calculating Metz's 2017 contribution margin percentage. Determine the formula, then enter the amounts to calculate the percentage. (Round the percentage to the nearest whole percent.) Contribution % Contribution margin 7,480,000 margin 34 $ $ Revenues 22,000,000 22,000,000 Using Sales Agents Using Own Sales Force % $ 9,680,000 44 % Calculate Metz's 2017 breakeven point in revenues. Begin by determining the formula, then enter the amounts to calculate the breakeven points. (Enter applicable percentages as as percentage rounded to the nearest whole percent. Round your answer up to the nearest whole dollar.) Breakeven Fixed costs Contribution margin percent revenues Using Sales Agents $ 5,746,000 34 % = $ 16,900,000 Using Own Sales Force $ 7,946,000 44 % = $ 18,059,091 = Calculate Metz's 2017 operating leverage. (Round your answer to two decimal places.) Operating Contribution margin leverage $ + $ Using Sales Agents Using Own Sales Force 4.31 Operating income 1,734,000 1,734,000 7,480,000 9,680,000 $ 5.58 noong from anu lint or or number in the insufield and then clickbooks AOC Read the requirements. . Revenues % margin 34 $ Contribution margin 7,480,000 9,680,000 $ 22,000,000 Using Sales Agents Using Own Sales Force % $ + $ 22,000,000 44 % Calculate Metz's 2017 breakeven point in revenues. Begin by determining the formula, then enter the amounts to calculate the breakeven points. (Enter applicable percentages as as percentage rounded to the nearest whole percent. Round your answer up to the nearest whole dollar.) Breakeven Fixed costs + Contribution margin percent revenues $ 5,746,000 34 % Using Sales Agents Using Own Sales Force = $ 16,900,000 $ 18,059,091 $ 7,946,000 44 % Calculate Metz's 2017 operating leverage. (Round your answer to two decimal places.) + Operating leverage 4.31 + Contribution margin Operating income Using Sales Agents $ 7,480,000 $ 1,734,000 Using Own Sales Force $ 9,680,000 $ 1,734,000 Requirement 2. Describe the advantages and disadvantages of each type of sales alternative. 5.58 The calculations indicate that at sales of $22,000,000, a percentage change in sales and contribution margin will result in times that percentage in if Metz continues to use sales agents and that percentage change in if Metz employs its own sales staff. times hoose from any list or enter any number in the input fields and then click Check Answer. 16 - Calculate Metz's 2017 operating leverage. (Round your answer to two decimal places.) Operating income 1,734,000 1,734,000 Operating leverage 4.31 5.58 Contribution margin Using Sales Agents $ 7,480,000 Using Own Sales Force $ Requirement 2. Describe the advan contribution margin net income The calculations indicate that at sale operating income in times that percentage ir variable expenses that percentage change in of sales alternative. in sales and contribution margin will result if Metz continues to use sales agents and if Metz employs its own sales staff. times Choose from any list or enter any number in the input fields and then click Check

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