P3-20 Breakeven Point; Selling Strategies; Income Tax Marston Corporation manufactures pharmaceutical products that are sold through a network of sales agents located in the L.S. and Canada. The agents are currently Iakid aun 18 ocomuniscion on sales, aud thes percentage was used when Miarston prepared the following Pro Forma Income Statement for the fiscal year ending June. 30. Year 5. Since the completion of the above statement, Marstom lis levamed that its aggents are requiring an increase in the commission rate to 23 , for the upcoming year. As a result, Marston s president has decided to investigate the possibility of hiring its own sades staff in place of the network of sales agents and has atsked Tom Ross, Marston's controller, to gather information on the costs associated with this ehatge- Ross estimates that Marston will have to hire eight sates people to cover the? curtert market area. The annud payroll cost of ench of these employers will aver: age $80,000, including fringe bemefit expense. Travel and entertainment expense. is expected to total $600,000 for the year, and the ammal cost of haring a sales manager and sales secretary will be $150,000. Ir addition to their selary, the eight Sales people will each earl commissions at the mate of 10om on the first sa million in sales and 1590 on all sales over $2 million. For planning purposes, Ross expects that all ejght sales people will be at the level previously projected. Ross believiss that Marston should also increase its advertising budget by $600,000. Required: 1. Calculate Marston Corporation's break-even point in sales dollars for the flscal year ending June 30 , Year 5 , if the company hires its own sades force and increases its advertising costs