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Klyne Corporation manufactures pharmaceutical products that are sold through a network of sales agents. The...

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Accounting

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Klyne Corporation manufactures pharmaceutical products that are sold through a network of sales agents. The agents are paid a commission of 22% of sales. The income statement for the year ending December 31, 2017, is as follows: KLYNE CORPORATION Income Statememt For the Year Ending December 31, 2017 Sales $ 28,000,000 Cost of goods sold Variable $ 13,720,000 2874,00016,594,000 Gross margin Selling and marketing expenses 11,406,000 Commissions Fixed costs 6,160,000 3,320,000 9,480,000 Operating income $1,926,000 Klyne is considering hiring its own sales staff to replace the network of agents. Klyne will pay its salespeople a commission of 10% and incur fixed costs of $2,084,000

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