September 11, 2023 at 10:50 PM pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies on independent sales agents to market its products. These agents are paid a sales commission of 15% for all items sold. Barbara Cheney, Pittman's controller, just prepared the company's budgeted income statement for next year as follows: Pittman Company Budgeted Income Statement mpany's budgeted Income For the Year Ended December 31 Sales $ 19,000,000 Manufacturing expenses: Variable Fixed overhead $ 8,550,000 2,660,000 Gross margin 11,210,000 7,790,000 Selling and administrative expenses: Commissions to agents Fixed marketing expenses 2,850,000 133,000* Fixed administrative expenses 1,920,000 Net operating income Fixed interest expenses Income before income taxes Income taxes (30%) 4,903,000 2,887,000 665,000 2,222,000 Net income Primarily depreciation on storage facilities. 666,600 $ 1,555,400 As Barbara handed the statement to Karl Vecci. Pittman's president, she commented