Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 15% for all items sold.

Barbara Cheney, Pittman's controller, has just prepared the company's budgeted income statement for next year as follows:

Pittman Company Budgeted Income Statement For the Year Ended December 31 Sales $ 16,333,333 Manufacturing expenses: Variable $ 2,233,333 Fixed overhead 2,343,333 3,543,333 Gross margin 6,453,333 Selling and administrative expenses: Commissions to agents 2,433,333 Fixed marketing expenses 123,333* Fixed administrative expenses 1,833,333 4,323,333 Net operating income 2,143,333 Fixed interest expenses 543,333 Income before income taxes 1,333,333 Income taxes [33%) 483,333 Net income $ 1,123,333 \fRequired 1 Required 2 Required 3 Required 4 Compute Pittman Company's break-even point in dollar sales for next year assuming: (Round CM ratio to 3 decimal places and final answers to the nearest dollar amount.) The agents\" commission rate remains unchanged at 15%. The agents\" commission rate is increased to 20%. c. The company employs its own saies force. Required 1 Required 2 Required 3 Required 4 Assume that Pittman Company decides to continue selling through agents and pays the 20% commission rate. Determine the dollar sales that would be required to generate the same net income as contained in the budgeted income statement for next year. (Round CM ratio to 2 decimal places.) Volume of sales (in dollars)\fRequired 1 Required 2 Required 3 Required 4 2Compute the degree of operating leverage that the company would expect to have at the end of next year assuming: (Use 5i smehsfsrs.Enemies: 2mmE.meeting.lemmasssmeyrat' 11-) ............................................................................................................... The agents\" commission rate remains unchanged at 15%. b. The agents\" commission rate is increased to 20%. c. The company employs its own sales force