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Oriole Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents....

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Accounting

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Oriole 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 31,2025 , is as follows. 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 $8,472,000. (a) Your answer is correct. Under the current policy of using a network of sales agents, calculate the Oriole Beauty Corporation's break-even point in sales dollars for the year 2025. Break-even point $ (b) Your answer is correct. Calculate the company's break-even point in sales dollars for the year 2025 if it hires its own sales force to replace the network of agents. Calculate the degree of operating leverage at sales of $70,600,000 if (1) Oriole Beauty uses sales agents, and (2) Oriole Beauty employs its own sales staff. (Round answers to 2 decimal places, e.g. 1.25.)

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