The independent sales agents\' commission rate remains unchanged at 16% Sales 33,000,000 Variable Cost: Cost of goods sold:- 17,100,000 Comission(16% of sales) 5280000 Total varibale cost 22,380,000 Contribution 10,620,000 Fixed cost per year Cost of goods sold 2,790,000 Fixed advertising expense $800,000 $800,000 $1,300,000 720,000 Fixed administrative expense $3,200,000 $3,200,000 $3,200,000 3,100,000 Payroll cost $700,000 690,000 Travel and entertainment expenses $400,000 330,000 Salaries of sales manager and support staff $200,000 180,000 Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs 7,810,000 Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs 2,810,000 The independent sales agents\' commission rate increases to 18%. Sales 33,000,000 Variable Cost: Cost of goods sold:- 17,100,000 Comission(18% of sales) 5940000 Total varibale cost 23,040,000 Contribution 9,960,000 Fixed cost per year Cost of goods sold 2,790,000 Fixed advertising expense $800,000 $800,000 $1,300,000 720,000 Fixed administrative expense $3,200,000 $3,200,000 $3,200,000 3,100,000 Payroll cost $700,000 Travel and entertainment expenses $400,000 Salaries of sales manager and support staff $200,000 Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs 6,610,000 Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs 3,350,000 C. C Sales 33,000,000 Variable Cost: Cost of goods sold:- 17,100,000 variable cost of goods sold to sales ratio*sales Comission(10% of sales) 3300000 Sales *commission rate Total varibale cost 20,400,000 Contribution 12,600,000 Sales-V.cost Fixed cost per year Cost of goods sold 2,790,000 Fixed advertising expense $800,000 $800,000 $1,300,000 1,140,000 Fixed administrative expense $3,200,000 $3,200,000 $3,200,000 3,100,000 Payroll cost $700,000 Travel and entertainment expenses $400,000 Salaries of sales manager and support staff $200,000 Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs 7,030,000 Total of all fixed cost Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs 5,570,000 Contribution -Total fixed costs 2.Calculate Marston Corporation\'s break-even point in sales dollars for the upcoming year assuming the following: (Round the CM ratio to 2 decimal places. Enter your answers in whole dollars and not in thousands.) The independent sales agents\' commission rate remains unchanged at 16%. A B C Sales 33,000,000 33,000,000 33,000,000 Variable Cost: Cost of goods sold:- 17,100,000 17,100,000 17,100,000 Comission(16% of sales) 5280000 5940000 3300000 Total varibale cost 22,380,000 23,040,000 20,400,000 Contribution 10,620,000 9,960,000 12,600,000 Contribution margin ratio 0.321818182 0.301818182 0.381818182 Fixed cost per year Cost of goods sold 2,790,000 2,790,000 2,790,000 Fixed advertising expense $800,000 $800,000 $1,300,000 720,000 720,000 1,140,000 Fixed administrative expense $3,.

1. The independent sales agents' commission rate remains unchanged at 16%
Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
Comission(16% of sales)
5280000
Total varibale cost
22,380,000
Contribution
10,620,000
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
690,000
Travel and entertainment expenses $400,000
330,000
Salaries of sales manager and support staff $200,000
180,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,810,000
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
2,810,000
The independent sales agents' commission rate increases to 18%.
Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000

2. Comission(18% of sales)
5940000
Total varibale cost
23,040,000
Contribution
9,960,000
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
Travel and entertainment expenses $400,000
Salaries of sales manager and support staff $200,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
6,610,000
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
3,350,000
C.
C
Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
variable cost of goods sold to sales ratio*sales
Comission(10% of sales)
3300000
Sales *commission rate
Total varibale cost
20,400,000
Contribution
12,600,000

3. Sales-V.cost
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
1,140,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
Travel and entertainment expenses $400,000
Salaries of sales manager and support staff $200,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,030,000
Total of all fixed cost
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
5,570,000
Contribution -Total fixed costs
2.Calculate Marston Corporation's break-even point in sales dollars for the upcoming year
assuming the following: (Round the CM ratio to 2 decimal places. Enter your answers in whole
dollars and not in thousands.)
The independent sales agents' commission rate remains unchanged at 16%.
A
B
C
Sales
33,000,000
33,000,000
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
17,100,000
17,100,000
Comission(16% of sales)
5280000
5940000

4. 3300000
Total varibale cost
22,380,000
23,040,000
20,400,000
Contribution
10,620,000
9,960,000
12,600,000
Contribution margin ratio
0.321818182
0.301818182
0.381818182
Fixed cost per year
Cost of goods sold
2,790,000
2,790,000
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
720,000
1,140,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
3,100,000
3,100,000
Payroll cost $700,000
690,000
Travel and entertainment expenses $400,000
330,000
Salaries of sales manager and support staff $200,000
180,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,810,000
6,610,000
7,030,000

5. Break even point in sales $
$24,268,361.58
$21,900,602.41
$18,411,904.76
(BEP in sales dollars =Fixed cost /contribution margin ratio
Refer to your answer to (1)(b) above. If the company employs its own sales force, what volume
of sales would be necessary to generate the net operating income the company would realize if
sales are $33,000,000 and the company continues to sell through agents (at a 18% commission
rate)? (Round the CM ratio to 2 decimal places. Enter your answers in whole dollars and not in
thousands.)
Net operating income when sales are $33,000,000 and the company continues to sell through
agents (at a 18% commission rate) $9,960,000
Total fixed cost when company employs its own force $6,610,000
Contribution margin ratio when company employs its own force 30.00%
Sales required to generate the net operating income the company would realize if sales are
$33,000,000 and the company continues to sell through agents (at a 18% commission rate)? =
(Net operating profit +Total fixed cost) / contribution margin ratio =(3350,000+$6610000)/30%
$3,320,0000
Determine the volume of sales at which net operating income would be equal regardless of
whether Marston Corporation sells through agents (at a 18% commission rate) or employs its
own sales force.(Round the CM ratio to 2 decimal places. Enter your answers in whole dollars
and not in thousands.)
Contribution margin ratio 22.00% 32.00%
32%
30%
Total fixed cost $6,800,000 $8,600,000
7,810,000
6,610,000
Net profit sales *22% -$6800000 Sales *32% -$8600000
2750000
3290000
Sales *32% -$7810000= sales *30% -6610000
$7810000-$6610000= sales *32% -Sales *30%
$1200000 =sales*10%
Sales =$1200000/2%= $60,000,000a.
The independent sales agents' commission rate remains unchanged at 16%

6. Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
Comission(16% of sales)
5280000
Total varibale cost
22,380,000
Contribution
10,620,000
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
690,000
Travel and entertainment expenses $400,000
330,000
Salaries of sales manager and support staff $200,000
180,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,810,000
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
2,810,000b.
The independent sales agents' commission rate increases to 18%.
Solution
The independent sales agents' commission rate remains unchanged at 16%
Sales
33,000,000
Variable Cost:

7. Cost of goods sold:-
17,100,000
Comission(16% of sales)
5280000
Total varibale cost
22,380,000
Contribution
10,620,000
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
690,000
Travel and entertainment expenses $400,000
330,000
Salaries of sales manager and support staff $200,000
180,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,810,000
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
2,810,000
The independent sales agents' commission rate increases to 18%.
Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
Comission(18% of sales)
5940000
Total varibale cost
23,040,000
Contribution

8. 9,960,000
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
Travel and entertainment expenses $400,000
Salaries of sales manager and support staff $200,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
6,610,000
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
3,350,000
C.
C
Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
variable cost of goods sold to sales ratio*sales
Comission(10% of sales)
3300000
Sales *commission rate
Total varibale cost
20,400,000
Contribution
12,600,000
Sales-V.cost
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000

9. 1,140,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
Travel and entertainment expenses $400,000
Salaries of sales manager and support staff $200,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,030,000
Total of all fixed cost
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
5,570,000
Contribution -Total fixed costs
2.Calculate Marston Corporation's break-even point in sales dollars for the upcoming year
assuming the following: (Round the CM ratio to 2 decimal places. Enter your answers in whole
dollars and not in thousands.)
The independent sales agents' commission rate remains unchanged at 16%.
A
B
C
Sales
33,000,000
33,000,000
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000
17,100,000
17,100,000
Comission(16% of sales)
5280000
5940000
3300000
Total varibale cost
22,380,000
23,040,000
20,400,000

10. Contribution
10,620,000
9,960,000
12,600,000
Contribution margin ratio
0.321818182
0.301818182
0.381818182
Fixed cost per year
Cost of goods sold
2,790,000
2,790,000
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
720,000
1,140,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
3,100,000
3,100,000
Payroll cost $700,000
690,000
Travel and entertainment expenses $400,000
330,000
Salaries of sales manager and support staff $200,000
180,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,810,000
6,610,000
7,030,000
Break even point in sales $
$24,268,361.58
$21,900,602.41
$18,411,904.76
(BEP in sales dollars =Fixed cost /contribution margin ratio

11. Refer to your answer to (1)(b) above. If the company employs its own sales force, what volume
of sales would be necessary to generate the net operating income the company would realize if
sales are $33,000,000 and the company continues to sell through agents (at a 18% commission
rate)? (Round the CM ratio to 2 decimal places. Enter your answers in whole dollars and not in
thousands.)
Net operating income when sales are $33,000,000 and the company continues to sell through
agents (at a 18% commission rate) $9,960,000
Total fixed cost when company employs its own force $6,610,000
Contribution margin ratio when company employs its own force 30.00%
Sales required to generate the net operating income the company would realize if sales are
$33,000,000 and the company continues to sell through agents (at a 18% commission rate)? =
(Net operating profit +Total fixed cost) / contribution margin ratio =(3350,000+$6610000)/30%
$3,320,0000
Determine the volume of sales at which net operating income would be equal regardless of
whether Marston Corporation sells through agents (at a 18% commission rate) or employs its
own sales force.(Round the CM ratio to 2 decimal places. Enter your answers in whole dollars
and not in thousands.)
Contribution margin ratio 22.00% 32.00%
32%
30%
Total fixed cost $6,800,000 $8,600,000
7,810,000
6,610,000
Net profit sales *22% -$6800000 Sales *32% -$8600000
2750000
3290000
Sales *32% -$7810000= sales *30% -6610000
$7810000-$6610000= sales *32% -Sales *30%
$1200000 =sales*10%
Sales =$1200000/2%= $60,000,000a.
The independent sales agents' commission rate remains unchanged at 16%
Sales
33,000,000
Variable Cost:
Cost of goods sold:-
17,100,000

12. Comission(16% of sales)
5280000
Total varibale cost
22,380,000
Contribution
10,620,000
Fixed cost per year
Cost of goods sold
2,790,000
Fixed advertising expense $800,000 $800,000 $1,300,000
720,000
Fixed administrative expense $3,200,000 $3,200,000 $3,200,000
3,100,000
Payroll cost $700,000
690,000
Travel and entertainment expenses $400,000
330,000
Salaries of sales manager and support staff $200,000
180,000
Total fixed cost $6,800,000 $6,800,000 $8,600,000 Total of all fixed costs
7,810,000
Net operating income $400,000 ($200,000) $1,000,000 Contribution -Total fixed costs
2,810,000b.
The independent sales agents' commission rate increases to 18%.