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Calculate the companys break-even point in sales dollars for the year 2020 if it hires...

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Accounting

imageCalculate the companys break-even point in sales dollars for the year 2020 if it hires its own sales force to replace the network of agents.

Break-even point $

Swifty Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 20% of sales. The income statement for the year ending December 31, 2020, is as follows. SWIFTY BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2020 Sales $79,500,000 Cost of goods sold Variable $33,390,000 Fixed 8,670,000 42,060,000 Gross margin $37,440,000 Selling and marketing expenses Commissions $15,900,000 Fixed costs 10,159,000 26,059,000 Operating income $11,381,000 The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8% and incur additional fixed costs of $9,540,000

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