(Projected income statement) Last year's income statement for Joyner Com-

pany follows.

This year, sales in units are expected to increase by 20 percent; material and labor costs are expected to increase by 10 percent. Overhead is applied to production based on a percentage of direct labor costs. Fixed selling ex¬ penses total $12,000; the remainder varies with sales dollars. All administra¬ tive costs are fixed.
Management desires to earn 10 percent on sales this year and will adjust the unit selling price if necessary. Develop a pro forma income statement for the year for Joyner Company that incorporates the indicated changes.LO.1 

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Sales (50,000 x $10) Cost of goods sold Direct material Direct labor Overhead Gross profit Expenses Selling Administrative Income before taxes $200,000 100,000 50,000 $ 50,000 60,000 $ 500,000 (350,000) $ 150,000 (110,000) $ 40,000