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Requirement 3. Direct estimates that the company is equaly likely to sel 17,500,27,500,37,500,47,500, or 57,500 pages of print Using information from the original problem, prepare

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Requirement 3. Direct estimates that the company is equaly likely to sel 17,500,27,500,37,500,47,500, or 57,500 pages of print Using information from the original problem, prepare a table that shows the expoctod peofit at each sales level under the foxed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Direct choose? Begin with the fixed leasing agreement, (Use parenthesos or a minus sign for losses.) Floed leasing agreement Next, caloulate the expected proft at each sales level under the comistion based egreement. Direct Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Direct would pay a commission for its printing at a rate of $20 for every 500 pages printed. The company currently charges $0.21 per page to its customers. Th paper used in printing costs the company $0.07 per page and other variable costs, including hourly labor, amount to $0.09 per pago. Read the reguirements. Requirement 1. What is the company's breakeven point under the current leasing agreament? What is it under the new commission-based agreement? First, determine the formula used to calculate the breakeven point in units, then calculate the companys breakeven point under the current leasing agreement. (Enter a " 0 " for any zeco balanced What is it under the new commission-based agreement? (Enter a " 0 for any zero balances.) The gpmpany's breakeven point under the new commission-based agreement is units. Requirement 2. For what range of ales levels will Diect prefer (a) the foed lease agreement and (b) the commission agreement? In order to determine the range of sales levels Direct would prefer for each agreement, wo must first calcutate the indifference point. The indifforence point : Now calculate the indifference point. (Round to the nearest whole number). The indiflerence point is at units Direct would profer the frod loase agreement at The comrission based agreement would be preferred at Direct Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirey commission based. Under the new agreement, Direct would pay a commission for its printing at a rate of $20 for every 500 pages printed. The company currently charges $0.21 per page to its customers. The paper used in printing costs the company $0.07 per page and other variable costs, including hourty labor, amount to $0.09 per page. Read the tequirements. Next, calculate the expected profit at each sales level under the commistion based agreement. f Commission-based agreement Direct should choose agreement

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