Pharoah Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The...

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Pharoah Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The forecast income statement for the year ending December 31, 2022, is as follows: PHAROAH BEAUTY CORPORATION Income Statement Year Ending December 31, 2022 Sales $78,220,000 Cost of goods sold Variable $37,545,600 Fixed 7,800,000 45,345,600 Gross margin 32,874,400 Selling and marketing expenses Commissions Fixed costs Operating income $14,079,600 10,118,000 24,197,600 $8,676,800 The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 10% and incur fixed costs of $6,257,600. Pharoah Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The forecast income statement for the year ending December 31, 2022, is as follows: PHAROAH BEAUTY CORPORATION Income Statement Year Ending December 31, 2022 Sales $78,220,000 Cost of goods sold Variable $37,545,600 Fixed 7,800,000 45,345,600 Gross margin 32,874,400 Selling and marketing expenses Commissions Fixed costs Operating income $14,079,600 10,118,000 24,197,600 $8,676,800 The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 10% and incur fixed costs of $6,257,600.