Dickens Company ("Dickens" or "Company") can sell 15,000 units of its new product at a selling price of $116. The unit cost is $72. The Company's target profit is 40% of sales. The Vice President of Marketing has learned that a competitor plans to introduce a similar product for $104. The Vice President has recommended that Dickens match the competitor's price. She believes the lower selling price will increase sales volume by 20%.

Required:

1. Compute the Company's net income assuming the product is sold for $116 and the costs remain at $72. Assume there were no additional costs.
2. Compute the product's per unit target cost if it is sold at a $116 selling price.
3. Compute the Company's net income if the target cost computed in Requirement 2 is achieved.
4. Compute the change in income from Requirement 1 if the product is sold for $104, costs remain at $72, and volume is increased by 20%.