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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 26% of sales. The
Klyne Corporation manufactures pharmaceutical products that are sold through a network of sales agents. The agents are paid a commission of 26% of sales. The income statement for the year ending December 31, 2020, is as follows: $ 31,500,000 KLYNE CORPORATION Income Statement For the Year Ending December 31, 2020 Sales Cost of goods sold Variable $17,640,000 Fixed 2,630,000 Gross margin Selling and marketing expenses Commissions 8,190,000 Fixed costs 2,045,000 Operating income 20,270,000 11,230,000 10,235,000 $ 995,000 Klyne is considering hiring its own sales staff to replace the network of agents. Klyne will pay its salespeople a commission of 15% and incur fixed costs of $2,091,000. Required: 1. Calculate Klyne Corporation's break-even point in sales dollars for the year 2020. (Round your answer to 2 decimal places.) Break-even point 4. If Klyne increases the commission paid to its sales staff to 20%, keeping all other costs the same, how much revenue (in dollars) would Klyne have to generate to earn the same operating income it did in 2020? (Round your answer to 2 decimal places.) Revenue (in dollars)
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