An Insurance Company Is Considering Using Independent Sales Agents Who

question 218

Multiple Choice

An insurance company is considering using independent sales agents who would receive a seven percent (7%) sales commission on sales or its own insurance salespeople who would receive a five percent (5%) commission,salaries,and benefits.Additionally,with a company salesforce,sales administration costs would be incurred for a total fixed cost of $650,000 per year.At what level of sales would independent salespeople be less costly to the firm?

• A)$650,000
• B)$3,250,000
• C)$6,500,000
• D)$32,500,000
• E)$35,200,000

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Definitions:

Dualism

The philosophical or religious belief that reality consists of two fundamental entities, such as mind and matter, or good and evil.

Nonmaterial Realm

A concept or domain that is not physical or tangible, often associated with spiritual or intellectual aspects.

Spiritual Realm

A dimension or aspect of existence that pertains to the non-physical, often associated with religious, mystical, or supernatural phenomena.

Francis Bacon

An English philosopher and statesman who is known for developing the scientific method.