Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use below information for Questions 1 to 3: Kaynak Inc. manufactures tables that are sold through a network of sales agents. The agents are paid

image text in transcribed

Use below information for Questions 1 to 3: Kaynak Inc. manufactures tables that are sold through a network of sales agents. The agents are paid a commission at a percent of sales basis. For the year ending December 31, 2017, Sales have been TL89,000,000. Gross profit margin and operating profit margin have been reported to be 39% and 17%, respectively. 48% of COGS have been variable. Besides, 82% of operating expenditures have been variable sales commissions. The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8.70% and incur additional fixed costs of TL4,520,000. Q-1) Calculate the degree of operating leverage at sales TL89,000,000 if the company uses sales agents. Q-2) Saadettin Bey, the owner of Kaynak Inc., considers employing in-house sales staff. Calculate the change in net income in TL if sales increase by 10% assuming in-house sales staff is employed. Q-3) Calculate the estimated sales volume in TL that would generate an identical net income for the year ending December 31, 2017, regardless of whether the company uses sales agents or employs its own sales staff

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Government Audit An Effective Tool For The Anti Corruption Struggle In The New Era Of Chinas Governance

Authors: Bowen Zou, Yanzhe Dr. Zhang, Yang Dr. ZHAO, Jian Dr. Zhang

1st Edition

1844646068, 978-1844646067

More Books

Students also viewed these Accounting questions

Question

Distinguish between the perpetual and peri- odic inventory systems.

Answered: 1 week ago