Figure 20-5

Figure 20-5
-insurance company is considering using either (a) independent sales agents who would receive a seven percent (7%) sales commission on sales or (b) 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