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

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Accounting

Olin Beauty Corporation manufactures cosmetic products that aresold through a network of sales agents. The agents are paid acommission of 18% of sales. The forecast income statement for theyear ending December 31, 2020, is as follows:

OLIN BEAUTY CORPORATION
Income Statement
Year Ending December 31, 2020
Sales$78,335,000
Cost of goods sold
Variable$36,034,100
Fixed

7,880,000

43,914,100

Gross margin34,420,900
Selling and marketing expenses
Commissions$14,100,300
Fixed costs

10,084,000

24,184,300

Operating income

$10,236,600

The company is considering hiring its own sales staff to replacethe network of agents. It will pay its salespeople a commission of9% and incur fixed costs of $7,050,150.

Under the current policy of using a network of sales agents,calculate Olin Beauty Corporation’s break-even point in salesdollars for the year 2020.

Break-even point:$

Calculate the company's break-even point in sales dollars forthe year 2020 if it hires its own sales force to replace thenetwork of agents. (Round answer to the nearest wholedollar, e.g. 5,275.)

Break-even point:$

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