4. Rundle Company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and budgeted annual income statements for each of the products follow.

Relevant Information
Skin Cream	Bath Oil	Color Gel
Budgeted sales in units (a)	126,000	206,000	86,000
Expected sales price (b)	$	8	$	6	$	13
Variable costs per unit (c)	$	2	$	4	$	9
Income statements
Sales revenue (a b)	$	1,008,000	$	1,236,000	$	1,118,000
Variable costs (a c)	(252,000	)	(824,000	)	(774,000	)
Contribution margin	756,000	412,000	344,000
Fixed costs	(576,000	)	(320,000	)	(108,000	)
Net income	$	180,000	$	92,000	$	236,000

Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume.

RUNDLE COMPANY
Income Statements
Skin Cream	Bath Oil	Color Gel
Sales revenue
Variable costs
Contribution margin	$0	$0	$0
Fixed cost
Net income	$0	$0	$0