Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Choosing between compensation plans, operating leverage (CMA, adapted) Marston Corporation manufactures pharmaceutical products that are sold through a network of external sales agents. The agents are paid a commission of 18% of revenues. Marston is considering replacing the sales agents with its own salespeople, who would be paid a commission of 10% of revenues and total salaries of $2,080,000. The income statement for the year ending December 31, 2008, under the two scenarios is shown here.If you want to use Excel to solve this problem, go to the Excel Lab at www.prenhall.com/horngren/cost13e download the template for Problem 3-43.
1. Calculate Marston's 2008 contribution margin percentage, breakeven revenues, and degree of operating leverage under the two scenarios.
2. Describe the advantages and disadvantages of each type of sales alternative.
3. In 2009, Marston uses its own salespeople, who demand a 15% commission. If all other cost behavior patterns are unchanged, how much revenue must the salespeople generate in order to earn the same operating income as in2008?
A
B
C D E
Income Statement
For the Year Ended December 31, 2008
4
Using Sales Agents
Using Own Sales Force
5
Revenues
$26,000,000
6
Cost of goods sold
7
Variable
$11,700,000
co I m 1
Fixed
2.870.000
14,570 000
2,870.000
14,570,000
Gross margin
11,430,000
10
Marketing costs
11
Commissions
5 4,680,000
$ 2,600,000
12
Fixed costs
3,420.000
8100.000
11.1311000
5.500,000
8.10 000
13
Operating income
i
1113020
Evaluate Method of measuring costs associated with production, budgeting process, normal job-order costing system , master budget, cycle time.
Prepare the journal entries to record the bond issue and interest expense.
Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.
Prepare Revenues budget and Production budget in units
Effect of exchange rate changes on cash and cash
You are to reflect on how this case of China Sky relates to what the arguments for and against allowing audit firm partners and/or employees to join audit committees.
A cost-benefit analysis of electronic medical records in primary care
Theory of Interest- Non-annual interest rates and annuities
How is job costing in service organizations different from job costing in manufacturing environments?
Accounting for bad debt expense
Accounting and Partnership problems
Development of relevant cash flows - Cost estimating and financial analysis
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd