Please only answer requirement 3. Got $27,961,538.46 but it is incorrect. Please help, thanks.

Check my work mode: This shows whet is correct or incorrect for the work you have completed so fer. It does not indicate Return to question Pittman Company is a small but growing manufacturer oft telecommunications equipment. The company has no sales force of its own; rather, It relles completely on Independent sales agents to market Its products. These agents are pald 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: 40 paines Pittman Ca mpany Budgeted Income Statement For tha Yoar Ended Decenher 31 Sales $25,008,800 Manufacturing expenses Variahl Fixed overhead $11,258,aae 3, 500, 800 14,758,000 18,258,868 Gross margin Selling and administrative Commissions to agents rixed marketing expenses Fixed administrative expenses 2,1 3,750,800 175,800 880 6,885,880 4,165, 8ee Net operating income Fixed interest Incone before income taxes 3,298,800 987,008 $ 2,383,90e Income taxes (30%) Net income Primarily deprection on storage fecilinics As Barbara handed the stateme to Karl Vecci, Pittman's presidet, she conmented, "1 went ahead and used the agents 15% commission rate in completing these statements, but we've lust learned that they refuse to handle our products next year unless we increase the commission rate to 20 "That's the last straw, Karl replied angrily. "Those agents have been demanding more and more, and this time they've gone too far How can they possibly defend a 20% commission rate?" "They clalm that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit, rcplied Barbara. "l say it's just plain rohbery, retorted Karl "Andalo say it's time we dumped those guys and got our own sales force. Carn you get your people to work up some cost figures for us to Icok at? .we've already worked them up," said Barbara. "Several companies we know about pay a 75% commission to their own salespecple, along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses would increase by $3.750000 per year, but that would be more than orset by the $5000000(20% $25,000,000) that we would avoid on ogents' commissions. The breakdown of the $3.750,000 cost follows: Salaries: s 156,258 937,508 625,806 2,831,250 sales manager Travel arid entertainmenL Advortising Total $3,750,868 "Super," replied Karl. "And i noticed that the $3,750,000 equals what we're paying the agents under the old 15% commission rate. "It's even better than that," explalnecl Barbara. "We can actualty save S115,000 a year because that's what we're paying our auditors to check out the agents reports So cur overall adm nistrative expenses would be less "Pull all of these numbers together and we'll show them to the executive committee tomoo, sad Kan "With the approval of the committce, wc can move on the matter immcdiatcly. Required: 1 Compute Prttman Company's break-even point in dollar soles for next year assurring a. 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. 2. Assume that Pittman Company decdes 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 contalned In the budgeted Income statemen: for next ycar 3. Determine the dollar sales at which net income would he equal regardless cf whether 'ittman Company sells through agents {at a 20% commission rate) or employs rts own sales force. 4. Compute the degree of cperating leveragc that the company would cxpcct to have at the end of next ycar assuming a. The agents commission rate remains unchanged at 15%. b The agents' commission rate is increased to 20%. c. The company ermplcys its own sales force Use Income berore Income taxes In your operating leverage computatlon. 8 Answer is complete hut not entirely correct. Prew1 of 1 Next