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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 18% of sales.
Klyne Corporation manufactures pharmaceutical products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The income statement for the year ending December 31, 2020, is as follows: KLYNE CORPORATION Income Statement For the Year Ending December 31, 2020 Sales Cost of goods sold $ 35,000,000 Variable Fixed $15,750,000 3,049,460 18,799,460 Gross margin 16,200,540 Selling and marketing expense's Commissions 6,300,000 Fixed costs 3,780,000 10,080,000 Operating income $ 6,120,540 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 $2,080,000. 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 2. Calculate Klyne Corporation's break-even point in sales dollars for the year 2020 if the company had hired its own sales force to replace the network of agents. (Round your answer to 2 decimal places.) Break-even point
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