Test-take home X How to manaux meducation.com/ext/map/index.html con contrat browser YouTube Maps New The Adda med MM... All Categories TX St Charts Tax World of War 3A%252 immeducation.com 252Fmgmidd352 Pittman Company is a small but growing manufacturer of 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 paid a sales commission of 15 for a items sold Barbara Cheney, Pitman's controller has just prepared the company's budgeted income statement for next year as follows: $20,000,000 in Com Budgeted the statement For the Year Ended December 11 Haufacturing cente Variable $ 1.000,00 Fixed verhead 2.500.000 Gross margin Selling and strategies Commission to 3,000,000 Fiets 140,000 Fixed winter tersting con wed interest Triconfefore contes Ineta 11.100.000 1,200,000 IN 0 000 1,400.000 220.000 $ 1.000.000 "Primarily depreciation on storage facilities As Barbara handed the statement to Karl Veces Pisman's president the commented went ahead and used the scenes 15 commission rate completing te statements. But we just learned money refuse to handle our products next year unless we increase the commission rate ts 20% That is the last straw or regleda Those agents have been waing more and mot and the time they ve con ote How can they possibly ofend 20 commentare They came ane paying for a vetrave the conso Dongler for pro reped Barbara " say at babbery ocean Araso nyit' cum eo those out our Own force Converge your people to room colors to Weve rady worked the EU come we now about common to their own salope alon maraty Or wou hieronder toe en speses would increase by S000.000 per yes butt Wooden cut by te su 000000120-520.000.000 that we would be on agents Commission Barbara -- "I say it's just plain robbery." retorted Karl. "And I also say it's time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?" "We've already worked them up." said Barbara, "Several companies we know about pay a 75% commission to their own salespeople. along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses would increase by $3,000,000 per year, but that would be more than offset by the $4,000,000 (20% - $20.000.000) that we would avoid on agents commissions The breakdown of the $3,000,000 cost follows: Salariest Sales manager Salespersons Travel and entertainment Advertising Total $ 125,000 750,000 500,000 1.625.000 $3,000,000 "Super" replied Karl "And I noticed that the $3.000.000 equals what we're paying the agents under the old 15% commission rate." "It's even better than that explained Barbara "We can actually save $92.000 a year because that's what we're paying our auditors to check out the agents reports. So our overall administrative expenses would be less." "Pull all of these numbers together and we'll show them to the executive committee tomorrow." said Karl With the approval of the committee, we can move on the matter immediately, Required: 1. Compute Pittman Company's break-even point in dollar sales for next year assuming 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 decides to continue selling through agents and pays the 20% commission rate. Determine the collar 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 equa regardless of whether Pittman Company sells through agents at a 209 commission rate or employs its own sales force 4. Compute the degree of operating leverade that the company would expect to have at the end of next year assuming a. The agents commission rate remains unchanged at 15 1 of 3 Next > es Pull all of these numbers together and we'll show them to the executive committee tomorrow." said Karl With the approval of the committee, we can move on the matter immediately Required: 1. Compute Pittman Company's break-even point in dollar sales for next year assuming 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 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 Pittman Company sells 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 of next year assuming a. The agents commission rate remains unchanged at 15% 6. The agents commission rate is increased to 20% c. The company employs its own sales force Use income before income taxes in your operating leverage computation Complete this question by entering your answers in the tabs below. Required 1 Required Required Required 4 Compute Pittman Company's break even point in dollar sales for next year assuming and Christo decimal and final anwers to the nearest dotat amount) Test-take home X How to manaux meducation.com/ext/map/index.html con contrat browser YouTube Maps New The Adda med MM... All Categories TX St Charts Tax World of War 3A%252 immeducation.com 252Fmgmidd352 Pittman Company is a small but growing manufacturer of 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 paid a sales commission of 15 for a items sold Barbara Cheney, Pitman's controller has just prepared the company's budgeted income statement for next year as follows: $20,000,000 in Com Budgeted the statement For the Year Ended December 11 Haufacturing cente Variable $ 1.000,00 Fixed verhead 2.500.000 Gross margin Selling and strategies Commission to 3,000,000 Fiets 140,000 Fixed winter tersting con wed interest Triconfefore contes Ineta 11.100.000 1,200,000 IN 0 000 1,400.000 220.000 $ 1.000.000 "Primarily depreciation on storage facilities As Barbara handed the statement to Karl Veces Pisman's president the commented went ahead and used the scenes 15 commission rate completing te statements. But we just learned money refuse to handle our products next year unless we increase the commission rate ts 20% That is the last straw or regleda Those agents have been waing more and mot and the time they ve con ote How can they possibly ofend 20 commentare They came ane paying for a vetrave the conso Dongler for pro reped Barbara " say at babbery ocean Araso nyit' cum eo those out our Own force Converge your people to room colors to Weve rady worked the EU come we now about common to their own salope alon maraty Or wou hieronder toe en speses would increase by S000.000 per yes butt Wooden cut by te su 000000120-520.000.000 that we would be on agents Commission Barbara -- "I say it's just plain robbery." retorted Karl. "And I also say it's time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?" "We've already worked them up." said Barbara, "Several companies we know about pay a 75% commission to their own salespeople. along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses would increase by $3,000,000 per year, but that would be more than offset by the $4,000,000 (20% - $20.000.000) that we would avoid on agents commissions The breakdown of the $3,000,000 cost follows: Salariest Sales manager Salespersons Travel and entertainment Advertising Total $ 125,000 750,000 500,000 1.625.000 $3,000,000 "Super" replied Karl "And I noticed that the $3.000.000 equals what we're paying the agents under the old 15% commission rate." "It's even better than that explained Barbara "We can actually save $92.000 a year because that's what we're paying our auditors to check out the agents reports. So our overall administrative expenses would be less." "Pull all of these numbers together and we'll show them to the executive committee tomorrow." said Karl With the approval of the committee, we can move on the matter immediately, Required: 1. Compute Pittman Company's break-even point in dollar sales for next year assuming 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 decides to continue selling through agents and pays the 20% commission rate. Determine the collar 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 equa regardless of whether Pittman Company sells through agents at a 209 commission rate or employs its own sales force 4. Compute the degree of operating leverade that the company would expect to have at the end of next year assuming a. The agents commission rate remains unchanged at 15 1 of 3 Next > es Pull all of these numbers together and we'll show them to the executive committee tomorrow." said Karl With the approval of the committee, we can move on the matter immediately Required: 1. Compute Pittman Company's break-even point in dollar sales for next year assuming 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 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 Pittman Company sells 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 of next year assuming a. The agents commission rate remains unchanged at 15% 6. The agents commission rate is increased to 20% c. The company employs its own sales force Use income before income taxes in your operating leverage computation Complete this question by entering your answers in the tabs below. Required 1 Required Required Required 4 Compute Pittman Company's break even point in dollar sales for next year assuming and Christo decimal and final anwers to the nearest dotat amount)