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. Backrunners Corporation Budgeted Income Statement for the year ending December 31, 2010 Sales ($50/pair of runners) Cost of goods sold (all variable) Gross profit Selling and administrative: Variable (commissions only) Fixed Net income $225,000 15.000 $1,500,000 900.000 600.000 240,000 $360.000 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 $90,000 and three salespeople at an annual salary of $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? What would be the amount of sales dollars required for the year ending December 31, 2010 to yield the same net income as projected in the budgeted income statement if Backrunners continues to use the independent sales agents and agrees to their demand for a 20% sales 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. Backrunners Corporation Budgeted Income Statement for the year ending December 31, 2010 Sales ($50/pair of runners) Cost of goods sold (all variable) Gross profit Selling and administrative: Variable (commissions only) Fixed Net income $225,000 15.000 $1,500,000 900.000 600.000 240,000 $360.000 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 $90,000 and three salespeople at an annual salary of $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? What would be the amount of sales dollars required for the year ending December 31, 2010 to yield the same net income as projected in the budgeted income statement if Backrunners continues to use the independent sales agents and agrees to their demand for a 20% sales commission