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Accounting 212 CVP Project Data Kindle, Inc. manufactures cosmetic products that are sold through a...

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Accounting 212 CVP Project Data Kindle, Inc. manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 12.5% of sales. The income statement for the year ending December 31, 2016, is as follow KINDLE, INC Income Statement Year Ending December 31, 2016 Sales Cost of goods sold $130,000 Variable Fixed Gross margin $58,500 14,350 72,850 57,150 Selling and marketing expenses Commissions Fixed costs Operating income $16,250 17.100 33,350 S 23 800 The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 10% and incur additional fixed costs of $13 million. Instructions (a) Under the current policy of using a network of sales agents, calculate Kindle, Inc.'s break- (b) Calculate the company's break-even point in sales dollars for the year 2016 if it hires its own (c) Calculate the degree of operating leverage at sales of $130 million if (1) Kindle, Inc. uses even point in sales dollars for the year 2016 sales force to replace the network of agents sales agents, and (2) Kindle, Inc. employs its own sales staff

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