Artic Camping Gears currently sells 35,000 units at 73 per unit. Its expenses are as follows:

Direct materials per unit	4.00.
Direct labour per unit	7.00
Variable manufacturing overhead per unit	3.00
Variable sales and administration expenses per unit	1.50
Fixed manufacturing overhead	21,000
Fixed sales and administration expenses	89,000
Taxes	15%

Management believes it can increase sales by 2,000 units for every 5 decrease in sales

price. It also believes the additional sales will allow a decrease in direct material per unit of

1 for each additional 2,000 units. Prepare a flexible budgeted income statement for 35,000,

37,000 and 39,000 unit sales.