Below are 2 separate proposals being considered. Create a contribution margin format income statement for the following using the March information as the base for each proposal to support your analysis and recommendations:

1. The Baker believes that if she uses pecans and raisins in the basic cinnamon bun recipe, that sales volume will increase by 25%. The additional cost per cinnamon bun for the pecans and raisins will be $.20. What will be the new net income under this proposal? Would you recommend proceeding with this proposal?

2. Sydney believes that if she increases the monthly advertising cost by $300 that the bakery will experience a 15% sales volume increase. What will the new net income be under this proposal? Would you recommend proceeding with this proposal?

Operational results Sydney's Bakery has provided you with activity and respective costs for three months below. 31 January February March Sales in units 2,800 per unit 3,400 per unit 3,000 per unit Sales revenue $ 18,480 $ 6.60 $ 22,440 $ 6.60 $ 19,800 6.60 Less: COGS $ (6,160) $ (2.20) $ (7.480) $ (2.20) $ (6,600) $(2.20) Gross Margin $ 12,320 $ 14,960 $ 13,200 Less Operating XP Insurance $ 800$ 0.29 $ 800 $ 0.24 $ 800 0.27 Rent $ 1,800 $ 0.64 $ 1,800 $ 0.53 $ 1,800 0.60 Deph $ 700$ 0.25$ 700$ 0.21 $ 700 0.23 Advertising $ 640 $ 0.23 $ 670 $ 0.20 $ 650 0.22 Salaries $ 7,100 $ 2.54 $ 7,850 $ 2.31 $ 7,350 2.45 Total Oper XP $(11,040) $(11,820) $(11,300) Net Income $ 1,280 $ 3,140 $ 1,900 All