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The company you work for as a managerial accountant engages independent agents to sell the company's products. These agents are currently being paid a commission
The company you work for as a managerial accountant engages independent agents to sell the company's products. These agents are currently being paid a commission of 15% based on sales price but are asking for an increase to 20% of sales made during the coming year. You had already prepared the following budgeted income statement for the company based on the 15% commission. Management wants to examine the possibility of employing the company's own sales people. They believe they will need a sales manager at an annual salary of dollar 90,000 and three salespeople at an annual salary of dollar 45,000 each plus a commission of 5% of sales. All other fixed costs as well as the variable cost percentages would remain the same as in the above pro-forma statement. Required: Based on the budgeted income statement you have already prepared, what is the break-even point in pairs and sales dollars for Backrunners for the year ending December 31,2010? If Backrunners employs its own salespeople, what would be the break-even point in sales dollars for the year ending December 31,2010? The company you work for as a managerial accountant engages independent agents to sell the company's products. These agents are currently being paid a commission of 15% based on sales price but are asking for an increase to 20% of sales made during the coming year. You had already prepared the following budgeted income statement for the company based on the 15% commission. Management wants to examine the possibility of employing the company's own sales people. They believe they will need a sales manager at an annual salary of dollar 90,000 and three salespeople at an annual salary of dollar 45,000 each plus a commission of 5% of sales. All other fixed costs as well as the variable cost percentages would remain the same as in the above pro-forma statement. Required: Based on the budgeted income statement you have already prepared, what is the break-even point in pairs and sales dollars for Backrunners for the year ending December 31,2010? If Backrunners employs its own salespeople, what would be the break-even point in sales dollars for the year ending December 31,2010
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