An insurance company is considering using independent sales agents who would receive 7 percent sales commission on sales or its own insurance salespeople who would receive 5 percent commission, salaries and benefits. Additionally, with a company sales force, 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?
a) $650,000
b) $5,416,667
c) $32,500,000
d) $35,200,000
e) Cannot be calculated given the information provided
Answer: c