x G google translate Googlex G goagle translate - Goog X l D Annual Report 2018 A Results and reports ! Auckl or topic) %20Questions.pdf follows Morrison Product B45 Budgeted Income Statement For the month ending June 30, 2019 $26,000 Sales (sales volume: 100) Manufacturing costs 7,800 - Variable 3,100 10.900 - Fixed overhead 15,100 Gross margin Selling and administrative expenses -Commissions (15% of selling price) 3,900 4050 7.950 $7.150 - Fixed administrative Net Profit After the profit plan was completed, Morrison's sales agents demanded that the commission be increased to 20% of the selling price. Mike Mars, the company's managing director thought that this demand was outrageous and he asked Gwyneth Hillson, a manager with some prior marketing experience, to estimate the cost to Morrison of employing its own sales force. Hillson's estimate of the additional monthly costs, exclusive of commission, are as follows Sales personnel would receive a commission of 10% of the selling price in addition to their salary; Estimated monthly fixed cost of Employing a Company Sales Force for Product B45. Fixed Salaries $1,800 Fixed marketing costs 410 Total $2,210 Required (a) Calculate the estimated break-even point in sales dollars for Product 845 for the month of June 2019 if Morrison employs its own sales force. (3 marks) If Morrison continues to sell through agents and pays the increased commission of 20% of b) selling price, determine break-even point in sales dollars; and the estimated sales dollars for June 2019 that would generate the same net profit ($7,150) as projected in the budgeted income statement for Product B45. (4 marks) (c) Determine the estimated sales dollars that would generate the same amount of net profit for June 2019 for the option of either (1) continuing to sell through agents and pay a commission of 20% of selling price or (2) employing its own sales force. (3 marks) Discuss whether Morrison should continue to sell through agents and pay a commission of (d) 20% of the selling price or employ its own sales force, what would you recommend and why? (3 marks) (e) One of the managers stated "Cost-volume-profit analysis is useful because it is so accurate." Comment on this statement. (2 marks) Page 3 of 4