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Sheridan Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 19% of sales.
Sheridan Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 19% of sales. The income statement for the year ending December 31,2022 , is as follows. The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 9% and incur additional fixed costs of $7,840,000. (a) Under the current policy of using a network of sales agents, calculate the Sheridan Beauty Corporation's break-even point in sales dollars for the year 2022. Break-even point $ Calculate the sales dollars that would generate an identical net income for the year ending December 31,2022 , regardless of whether Sheridan Beauty Corporation employs its own sales staff and pays them an 9% commission or continues to use the independent network of agents. Estimated sales volume
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