D$.$L$.$ Lu and Company, a manufacturer of quality handmade walnut bowls, has had a steady growth in sales for the past $5$ years. However, increased competition has led Mr$.$ Lu$,$

the president, to believe that an aggressive marketing campaign will be necessary next year to maintain the company's present growth. To prepare for next year's marketing campaign,

the company's controller has prepared and presented Mr$.$ Lu with the following data for the current year, $2020$:

$($Click the icon to view the data.$)$

Read the requirements.

Requirement $1.$ What is the projected net income for $2020?$

Using the equation method, select the basic formula used to compute the target net income for $2020.$

Data table

Variable cost $($per bowl$)$

Direct materials

Direct manufacturing labor

Variable overhead $($manufacturing$,$ marketing, distribution and

customer service$)$

Total variable cost per bowl

Fixed costs

Manufacturing

Marketing, distribution, and customer service

Total fixed costs

Selling price

Expected sales, $20,500$ units

Income tax rate

$$,16,000$

$132,500$

$=$$quad$148,500$

$$,27\mathrm{.}00$

$$,553,500$

$40\%$

PLEASE FOLLOW THE REQUIREMENTS