question archive Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents
Subject:AccountingPrice: Bought3
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The income statement for the year ending December 31, 2014, is as follows.
BONITA BEAUTY CORPORATION
Income Statement For the Year Ended December 31, 2014
Sales $75,000,000
Cost of goods sold
Variable $31,500,000
Fixed 8,610,000 40,110,000
Gross margin $34,890,000
Selling and marketing expenses
Commissions $13,500,000
Fixed costs 10,260,000 23,760,000
Operating income $11,130,000
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 $7,500,000.
Question: Calculate the sales dollars that would generate an identical net income for the year ending December 31, 2022, regardless of whether Bonita Beauty Corporation employs its own sales staff and pays them an 8% commission or continues to use the independent network of agents.
Estimated Sales Volume $ __________________________?????
