Zahner Corporation manufactures housewares products that are sold through a network of external sales agents. The agents are paid a commission of 20% of revenues. Zahner is considering replacing the sales agents with its own salespeople, who would be paid a commission of 10% of revenues and total salaries of $3,520,000. The income statement for the year ending December 31, 2017, under the two scenarios is shown here. Home Insert Page Layout Formulas Data Review View Zahner Corporation Income Statement For the Year Ended December, 2017 Using Sales Agents $35,200,000 3 Using Own Sales Force $35,200,000 5 Revenues 6 Cost of goods sold Variable $13,375,000 4,125,000 17,500,000 17,700,000 $13,375,000 4,125,000 17,500,000 Fixed 9 Gross margin 10 Marketing costs Commissions 17,700,000 $ 7,040,000 4,025.000 11,065,000 S 6,635.000 $ 3,520,000 7,545,000 11 11,065,000 S 6,635,000 Fixed costs 12 13 Operating income
Required
1. Calculate Zahner’s 2017 contribution margin percentage, breakeven revenue, and degree of operating leverage under the two scenarios.
2. Describe the advantages and disadvantages of each type of sales alternative.
3. In 2018, Zahner 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 in 2017?

Sye chase started and operated a small family architectural firm in 2016. the firm was affected by two events: (1) chase provided $25,000 of services on account, and (2) he purchased $2,800 of supplies on account. there were $250 of supplies on hand as of december 31, 2016. record the two transactions in the accounts. record the required year-end adjusting entry to reflect the use of supplies and the required closing entries. post the entries in the t-accounts and prepare a post-closing trial balance.

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?

When a shortage or a surplus arises in the loanable funds market a. the supply of loanable funds changes to return the economy to its original real interest rate b. the nominal interest rate is pulled to the new equilibrium level c. the demand for loanable funds changes to return the economy to its original real interest rate d. the real interest rate is pulled to the new equilibrium level