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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 $ 34,000,000 Cost of goods sold Variable Fixed $15,300,000 3,029,520 Gross margin 18,329,520 15,670,480 Selling and marketing expenses Commissions 6,120,000 Fixed conta 3,740,000 9,860,000 $ 5,810,480 Operating income 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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