1. The following Income statement was produced for Cat Company:

Sales $145,000

Cost of Goods Sold

Variable $64,000

Fixed $18,250

Selling and Marketing Expenses

Agent Commissions $25,000

Fixed Costs $17,100

Operating Income $20,650

The company is considering hiring its own sales staff to replace the network of agents. If it makes this change, it will pay its salespeople a commission of 7% and incur additional fixed costs of $15,000, primarily for salaries and benefits.

1. Under the current policy of using a network of sales agents, calculate the Cat Companys breakeven point in sales dollars and current margin of safety ratio.

2. Calculate the companys breakeven point in sales dollars if it hires its own sales force to replace the network of agents.

2. Fish City sells Trout, Salmon, and Walleye. The business is divided into three divisions along the product lines. Variable costing income statements for the current year are presented in the following data:

	Trout	Salmon	Walleye
Sales	$200,000	$500,000	$300,000
Variable Cost	$120,000	$320,000	$180,000

1. Determine the sales mix and contribution margin ratio for each division

2. Calculate the companys weighted average contribution margin ratio

3. Calculate the companys breakeven point in dollars, assuming fixed costs are $280,000

4. Determine the sales level, in dollars, for each division at the breakeven point