Assume that the company sells 10,000 units per quarter at $1000 per unit. Assume that Selling, General, and Administrative Expenses remain fixed at $5,000 for each year. Assume that the company purchases 10,000 units per quarter as well in an increasing price environment where prices start at $700 and increase by $50 each quarter. Will the company do better or worse in the following year? Note: Company had been using LIFO Method Note: Company had been reporting in '000 (thousands) Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold PRO-FORMA INCOME STATEMENT 2008 Q1 Activity Units ('000) Price Book Value Units ('000) Price Book Value Units ('000) Units 2022 (Level Price Book Value Price Book Value ('000) 2021 (Given) Sales) 15 $800 $ 12,000 $ Sales $ 33,500 $ $ - $ Cost of Goods Sold $ 23,000 $ Q2 Activity $ $ - $ Gross Margin $ 10,500 $ $ $ $ Selling and Admin. Exp. $ 5,000 $ 5,000 Q3 Activity $ $ - S Income before taxes $ 5,500 $ (5,000) $ S - $ Income Taxes (35%) $ 1,925 $ (1,750) Q4 Activity $ $ - $ Net Income $ 3,575 $ (3,250) $ $ $ Year 15 $900 $ 13,500 0 #DIV/0! $ 0 $ $ 0 $ - $ Units Sold per Quarter 10 4 Sales Price $1,000