Problem 20-6A (Part Level Submission) Bonita Beauty Corporation manufactures cos

Question

Problem 20-6A (Part Level Submission) Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commisson of 20% of sales. The income statement for the year ending December 31, 2017, is as follows. BONITA BEAUTY CORPORATION Income Statement For the Year Ended December 31, 2017 Sales $76,400,000 Cost of goods sold Variable Fixed Gross margin $32,852,000 8,720,000 41,572,000 $34,828,000 Selling and marketing expenses Commissions Fixed costs Operating income $15,280,000 10,360,000 25,640,000 $9,188,000 company is considering hiring its own sales starr to replace the network of agents. It will pay its salespeople a commission of 7% and incur additional hed costs of $9,932,0 Under the current policy of using a network of sales agents, calculate the Bonita Beauty Corporation's break-even point in sales dollars for the year 2017. (Round internediate calculations to 2 decimal places e.g. 10.25 and final answers to 0 decimal places, e.g. 2,510.) Break-even point Attempts: 0 of 3 used The parts of this question must be compieted in order. This part will be available when you complete the part above. *(c1) The parts of this question must be compieted in order. This part will be available when you complete the part above. The parts of this question must be compieted in order. This part will be available when you complete the part above.

Explanation / Answer

Particulars Amount Amount Sales $ 76,400,000.00 Less: Variable Costs Cost of goods Sold $            32,852,000.00 Commissions $            15,280,000.00 $ 48,132,000.00 CONTRIBUTION $ 28,268,000.00 Less: Fixed Costs Cost of goods Sold $              8,720,000.00 Selling & Marketing Exp $            10,360,000.00 $ 19,080,000.00 PROFIT $    9,188,000.00 PV ratio Contribution Sales PV Ratio (Contribution / Sales) X 100 $            28,268,000.00 $ 76,400,000.00 37% Break Point in Value Fixed Cost PV Ratio Break Even Point Fixed Cost / PV Ratio $            19,080,000.00 37% $ 51,567,568

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.