Use photos below to only answer questions with the red X's. Which is part A, in requirement 1 and requirement 3 and 4. Good luck.

Retur 9 Case 533 Cost Structure; Break-Even and Target Profit Analysis [LO54, LOSS, Los 10 points Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 15% for all tems solkd 01:09:06 Barbara Cheney, Pittman's controller, has just prepared the company's budgeted income statement for next year as follows: ittman Budgeted Incone Statement Sales Manufacturing expenses: 23,000,000 Variable Fixed overhead 10,350,000 3,220,000 13,570,000 Gross nargin Selling and adninistrative expenses Commissions to agents Pixed narketing expenses Fixed administrative expenses 3. 450,000 161,000 2080 000 5.691,000 Net operating income 3,739,000 2, 934.000 2,053,800 Incone before income taxes Incone taxes (308) Net income Primarily depreciation on storage facilities. As Barbara handed the statement to Karl Vecc, Pittman's president, she commented, "I went ahead and used the agents lS commission rate in completing these statements, but we've just learned that they refuse to handle our products next year unless we increase the commission rate to 20%" That's the last straw: Karl replied angrily. Those agents have been demanding more and more, and this time they've gone too far How can they possibly defend a 20% commission rate?" They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit: replied Barbara. Prev 9 of 121 Next >