Kindle, Inc. manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 12.5% of sales. The income statement for the year ending December 31, 2019, is as follow. KINDLE, INC. Income Statement Year Ending December 31, 2019 | Sales | | | | $130,000 | | Cost of goods sold | | | | | | | Variable | | $58,500 | | | | | Fixed | | 14,350 | | 72,850 | | | Gross margin | | | | 57,150 | | Selling and marketing expenses | | | | | | | Commissions | | $16,250 | | | | | Fixed costs | | 17,100 | | 33,350 | | | Operating income | | | | $23,800 | | The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 10% and incur additional fixed costs of $13,000. | | | |