Lionel Corporation manufactures pharmaceutical products sold through a network of sales agents in the United States and Canada The agents are currently paid an 18% commission on sales; that percentage was used when Lionel prepared the following budgeted income statement for the fiscal year ending June 30, 2019: Lionel Corporation Budgeted Income Statement For the Year Ending June 30, 2019 ($000 omitted) Sales Cost of goods sold $29,300 Variable Fixed $13,185 3,516 16,701 12,599 Gross profit Selling and administrative costs $ 5,274 879 2,344 Commissions Fixed advertising cost Fixed administrative cost 8,497 $4,102 733 $3,369 1,011 $ 2,358 Operating income Fixed interest cost Income before income taxes Income taxes (30%) Net income