Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relles completely on Independent sales agents to market its products. These agents are paid a sales commission of 15% for all Items sold. Barbara Cheney, Pittman's controller, has just prepared the company's budgeted Income statement for next year as follows: Pittman Company Budgeted Income statement For the Year Ended December 31 Sales Manufacturing expenses: variable Fixed overhead Gross margin selling and administrative expenses: Commissions to agents Fixed marketing expenses Fixed administrative expenses Net operating income Fixed interest expenses Income before income taxes Income taxes (30) $ 8,325,000 2,590,000 2,775,000 129,500* 1,900,eee $ 18,500,000 10,915,000 7,585,000 4,804,500 2,780,500 647,500 2,133,000 639.900
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relles completely on Independent sales agents to market its products. These agents are paid a sales commission of 15% for all Items sold. Barbara Cheney, Pittman's controller, has just prepared the company's budgeted Income statement for next year as follows: Pittman Company Budgeted Income statement For the Year Ended December 31 Sales Manufacturing expenses: variable Fixed overhead Gross margin selling and administrative expenses: Commissions to agents Fixed marketing expenses Fixed administrative expenses Net operating income Fixed interest expenses Income before income taxes Income taxes (30) $ 8,325,000 2,590,000 2,775,000 129,500* 1,900,eee $ 18,500,000 10,915,000 7,585,000 4,804,500 2,780,500 647,500 2,133,000 639.900
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 40P
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a and b are the correct answers
I just need the answer for question c
The company employs its own sales force
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