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Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no...

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Accounting

imageimageimage 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 items sold. Barbara Cheney, Pittman's controller, has just prepared the company's budgeted income statement for next year as follows: The breakdown of the $3,375,000 cost follows: 3. Determine the dollar sales at which net income would be equal regardless of whether Pittman Company sells through agents (at a 20% commission rate) or employs its own sales force. 4. Compute the degree of operating leverage that the company would expect to have at the end of next year assuming: a. The agents' commission rate remains unchanged at 15%. o. The agents' commission rate is increased to 20%. c. The company employs its own sales force. Jse income before income taxes in your operating leverage computation

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