ube LimaOhio.com- N What is Inventory M... settings to this site, reload this page nabled: Case 2-32 Project In Connecti Reload Sales Manufacturing expenses: Variable Fixed overhead Pittman Company Budgeted Income Statement For the Year Ended December 31 Gross margin Selling and administrative expenses: Commissions to agents Fixed marketing expenses Fixed administrative expenses Net operating income PayPal Holdings, h... CAN CNN.com-1 Fixed interest expenses Income before income taxes Income taxes (30 %) Net income $ 11, 700,000 3,640,000 3,900,000 182,000* 2,200,000 Saved $ 26,000,000 15,340,000 10, 660,000 6,282,000 4,378,000 910, 000 3,468,000 1,040, 400 $ 2,427,600 *Primarily depreciation on storage facilities. As Barbara handed the statement to Karl Vecci, Pittman's president, she comme commission rate in completing these statements, but we've just learned that the increase the commission rate to 20%." "That's the last straw," Karl replied angrily. "Those agents have been demanding How can they possibly defend a 20% commission rate?" "They claim that after paying for advertising, travel, and the other costs of promc Barbara.

nabled: Case 2-32 Project In Connect (i -Primarily depreciation on storage facilities. As Barbara handed the statement to Karl Veccl, Pittman's president, she comm commission rate in completing these statements, but we've just learned that th increase the commission rate to 20%." -That's the last straw," Karl replied angrily. "Those agents have been demandin How can they possibly defend a 20% commission rate?" -They claim that after paying for advertising, travel, and the other costs of prom Barbara. "They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit," 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. Ca your people to work up some cost figures for us to look at?" "We've already worked them up," said Barbara. "Several companles we know about pay a 7.5% commission to their own s along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses woul $3,900,000 per year, but that would be more than offset by the $5,200,000(20%$26,000,000) that we would avoid on commissions." The breakdown of the $3,900,000 cost follows: "Super," replied Karl. "And I noticed that the $3,900.000 equals what we're paying the ogents under the old 15% commissio "It's even better than that," explained Barbara. "We can actually save $119,600 o year because that's what we're paying our 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 approva committee. we can move on the matter immediatelv