David Davis operates a kiosk in downtown Chicago, at which he sells one style of baseball hat. He buys the hats from a supplier for $36 and sells them for $42. Davids current breakeven point is 33,600 hats per year.

A:How many hats must David sell to break even if his supplier raises the price of the hats to $37 per hat?

B: David has decided to increase his sales price to $43 to offset the suppliers price increase. He believes that the increase will result in a 5% reduction from last years sales volume. What is Davids expected net income, assuming a 30% tax rate?