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Please only original answers . Do not plagiarize . Thank you! Chapter 5 Case Study- Cost Structure, Break-Even and Target Profit Analysis Complete the following
Please only original answers. Do not plagiarize. Thank you!
Chapter 5 Case Study- Cost Structure, Break-Even and Target Profit Analysis Complete the following four steps for this assignment: Step 1 Open and read through the attached Chapter 5 Case Study Scenario Step 2 Download the Case Study Table below and complete it. Chapter 5 Case Study Table Step 3 Post your answers to the following questions. You must number your answers to match the questions. Use the information from your completed table. Upload contents of table into your response. I do not download files. 1. Compute Brothers Company's break-even point in dollar sales for next year assuming: a. at 15% commission rate b. at 20% commission rate c. employs its own salesforce 2. Assume that Brothers 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. 3. Determine the dollar sales at which net income would be equal regardless of whether Brothers Company sell through agents (at a 20% commission rate) or employs its own sales force. 4. Compute the degree of operating leverage that the company would expect to have at the end o fnext year assuming: a. a. at 15% commission rate b. at 20% commission rate c. employs its own salesforce 5. Use income before income taxes in your operating leverage computation. Case 5-32 (Static) Cost Structure; Break-Even and Target Profit Analysis [LO5-4,LO5-5,LO5-6] Brothers Company, LLC is a manufacturer of telecommunications equipment. To market its products, the company uses independent sales agents. The agents are paid a sales commission of 15% of the selling price of all items sold. Laura Lee, Brothers' controller, has just prepared the company's budgeted income statement for "They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit," replied Laura. "I'm not sure I agree." retorted Nicholas. "If we employ our own sales force, we might have more control. Can you pull together some cost figures for us to review?" "I already have them." said Laura. "Several other telecommunication companies I researched pay a 7.5% commission to their own salespeople, along with a small salary. Of course, we would have to cover all promotion costs, too. I figure our fixed expenses would increase by $2,400,000 per year, but that would be more than offset by the $3,200,000(20%$16,000,000) that we would avoid on agents' commissions." The breakdown of the $2,400,000 cost follows: Managerial Accounting Table used in Chapter 5 Case Study. Completion of this table will help you to answer questions 15. Enter the dollar amounts for all line items. Enter the percentages for sales, total variable expenses, and rontrihutinn marainStep by Step Solution
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