(Solved): Company X manufactures cosmetic products that are sold through a network of sales agents. The agents ...

Company X manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission at a percent of sales basis. Partial income statement for the last two years is as follows: Depreciation on office equipment was 110,000 and 110,000 in 2016 and 2017 , respectively. Beginning of 2018, the company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8.4% and incur additional fixed costs of TL7,590,000. Q-1) Calculate the degree of operating leverage at sales TL71,000,000 if the company uses sales agents. Q-2) Assume the company employs its own sales staff. Calculate the change in net income in TL if sales decrease by 10% at 25% corporate tax rate. Q-3) The company expects raw material prices to rise by 3.10% next year. Calculate the estimated sales volume in TL that would generate an identical net income for the year ending December 31, 2017, regardless of whether the company uses sales agents or employs its own sales staff.