Need help with Question 3:

1. Assuming sales of $30,000,000, construct a budgeted contribution margin format income statement for the upcoming year with the following alternatives.

B. The independent sales agents' commission rate increases to 20%.

3. Refer to your answer in (1)(B) above. If the company employs its own sales force, what volume of sales would be necessary to generate the same net operating income the company would generate in (1)(B) above.

*The net operating income I calculated in 1B is $ (200,000).

**Through trial & error of trying different numbers on Excel, I came up with a volume of sales of $28,777,778, but I don't know how to calculate it.

MOROCCO CORPORATION Budgeted Income Statement 18% $ 20% $ 30,000,000 30,000,000 Sales Variable COGS Commissions Contribution Margin 17,800,000 5,400,000 17,800,000 6,000,000 Own Sales Force (10% $ 30,000,000 17,800,000 3,000,000 20,800,000 $ 9,200,000 23,200,000 6,800,000 23,800,000 6,200,000 $ $ Less Fixed Costs: Fixed COGS Fixed Advertising Exp. Fixed Admin Exp. Fixed Employee Costs Fixed Travel & Entertainment Net Operating Income $2,400,000 800,000 3,200,000 $2,400,000 800,000 3,200,000 6,400,000 6,400,000 $2,400,000 1,300,000 3,200,000 1,000,000 400,000 8,300,000 900,000 $ 400,000 $ (200,000) $ Contribution Margin Ratio Break-Even Point 22.67% $ 28,235,294.12 20.67% $ 30,967,741.94 30.67% 27,065,217.39 $