Page 6 0 T mall but growing manufacturer of telecommunications equipment. The company has no sales foree allcom letely on independent sales agents to market its products. These agents are paid a sales s controller, has just prepared the company's budgeted income statement for next year. The 9 Wilde Company is a growing mar of its own; rather, it relies commission of 15% for all items sold. in commission of 15% f Oscar Cheney, Wilde' statement follows: Wilde Company Budgeted Income Statement For the Year Ended December 31 Sales Variable expenses $ 20,500 Manufacturing Sales commission 6,150 3,075 11,275 Total contribution margin Fixed expenses Manufacturing overhead Fixed marketing expenses 2,940 3702 Net operating income $ 7,965 Wilde is considering employing its own sales force. Salespersons will be paid a small fixed salary and a commission, which is determined by the industry practice. Such a change will increase the fixed marketing cost. The new numbers would be: Commission rate New (total) fixed marketing expense 10.00% 1,200 Determine the volume of sales at which net income would be equal regardless of whether Wilde Company sells through agents (at a 15% commission rate) or employs its own sales force. Choose the closest number. A. $ 13,833 B S 8,300 S 16,600 D. $ 20,500 E. None of the above Page 7 of 12 The CEO of Doyle thousands le Inc. has provided you with the following information for its operation for 2017. Dollar figures are in provid Sales Revenue Cost of goods sold Total contribution margin Fixed costs: manufacturing Fixe $200 120 100 40 20 20 d costs: selling and administrative Variable selling expense The tax rate for Doyle is 20%. lfthey want to increase the after-tax income for 2018 by $14, by how much do they have to increase their sales revenue? Assume everything else stays constant (including the price) A. S 17.50 B. S 32.00 Os35.00 D. S 43.75 E. None of the above 11 Morrison Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, it unit costs are as follows: Variable manufacturing cost (DM, DL, OH) Fixed manufacturing overhead Fixed selling and admin expense Variable selling and admin expense s 12.40 S 6.00 S 7.20 S 1.50 Total product costs and period costs when Morrison Company produces and sell 12,000 units are (respectively): Product cost Period Cost A. B. C. 220,800 208,800 166,800 104.400 104,400 158,400 None of the above