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Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a

Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below:

Sales (22,000 units at $105 per unit) $ 2,310,000
Variable expenses 1,386,000
Contribution margin 924,000
Fixed expenses 945,000
Net operating loss $ (21,000)

Refer to the original data. The president is convinced that a 10% reduction in the selling price, combined with an increase of $115,000 in the monthly advertising budget, will double unit sales. What will the new contribution format income statement look like if these changes are adopted?

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