A Company Is Thinking of Switching from Independent Sales Agents

Multiple Choice

A company is thinking of switching from independent sales agents to hiring its own sales force. If 10 salespeople were hired, they would be paid a 3% commission on sales plus a salary of $20,000 each. Independent sales agents are currently paid a commission of 5% on sales. At what sales volume is the company economically indifferent about which sales organization to use in a selling situation?

A) $1,000,000
B) $2,500,000
C) $10,000,000
D) $25,000,000