Assessing the Effects of Changes in Costs, Prices, and Volume on Profitability K&D Company plans the following for the coming year:

Required:
1. Determine K&D’s target income.
2. Compute what the target income would be under each of the following independent assumptions:

a. The sales volume increases 20%.

b. The sales price decreases 20%.

c. Variable costs increase 20%.

d. Fixed costs decrease 20%.

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Sales volume Sales price Variable costs Fixed costs 100,000 units $2.50 per unit $1.30 per unit $60,000