Edman Company is a merchandiser that has provided the following balance sheet and income statement for this year. Ending Balance Assets Cash Accounts receivable Inventory Property, plant & equipment (net) Other assets Total assets Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings Total liabilities & stockholders' equity Sales Variable expenses: Cost of goods sold Beginning Balance $ 62,800 $ 150,000 160,000 230,000 833,000 37,000 $1,322,800 180,000 240,000 793,000 37,000 $1,400,000 $ 70,000 550,000 410,000 $ 80,000 550,000 410,000 292,800 360,000 $1,322,800 $1,400,000 This Year $2,500,000 1,600,000 Variable selling expense 240,000 Total variable expenses 1,840,000 Contribution margin 660,000 Fixed expenses: Fixed selling expenses 220,000 Fixed administrative expenses 300,000 Total fixed expenses 520,000 Net operating income 140,000 Interest expense (8%) 44,000 Net income before tax Tax expense (30%) Net income 96,000 28,800 $ 67,200