(CMA) The income statement for Davann Co. presented below shows the operating results for the fisca year just ended. Davann had sales of 1,800 tons of product during that year. The manufacturing capacity of Davann's facilities is 3,000 tons of product. Revenues Variable costs: Manufacturing Nonmanufacturing Contribution margin Fixed costs: Manufacturing Nonmanufacturing Operating income Income taxes (40%) Net income $315,000 180.000 90,000 157.500 $900,000 495.000 405,000 247.500 157,500 63.000 $94.500 a. If the sales volume is estimated to be 2.100 tons for next year, and if the selling price and cost- behavior patterns remain the same next year, how much net income does Davann expect to earn next year? b. Assume Davann estimates the selling price per ton will decline 10% next year, variable cost will increase by $40 per ton, and total fixed costs will not change. Compute how many tons must be sold next year to earn net income of $94.500.

(CMA) The income statement for Davann Co. presented below shows the operating results for the fisca year just ended. Davann had sales of 1,800 tons of product during that year. The manufacturing capacity of Davann's facilities is 3,000 tons of product. a. If the sales volume is estimated to be 2,100 tons for next year, and if the selling price and costbehavior patterns remain the same next year, how much net income does Davann expect to earn next year? b. Assume Davana estimates the selling price per ton will decline 10% next year, variable cost will increase by $40 per ton. and total fixed costs will not change. Compute how many tons must be sold next year to eam net income of $94.500