Big Chill, Inc. sells portable dehumidifier units at the currentprice of $183. Unit variable costs are $75. Fixed costs, made upprimarily of salaries, rent, insurance and advertising, are$4,018,000. Calculate breakeven sales for Big Chill, Inc. Roundyour answer to the nearest whole number.
A manufacturer is considering a switch from manufacturers’representatives to an internal sales force. The following costestimates are available. Manufacturers’ reps are paid 8.7%commission and incur $610,000 in fixed costs, while an internalsales force has fixed costs projected at $2,150,000 and wouldreceive 2.7% commission. Assume that sales revenue is double thebreakeven volume or the point at which the manufacturer would beindifference between reps and an internal sales force. At thisvolume, how much would the manufacturer save, assuming the companyhad switched to an internal sales force? Report your answer indollars.
