Frontleg Chocolate Company manufactures and sells a premium chocolate called PremiumChoco. The following data are available for preparing budgets for PremiumChoco for June through August of 2020. 1. Sales: June , 30,000 pounds; July, 56,000 pounds, August 58,000 pounds. 2. Direct materials: each pound of PremiumChoco requires 5 pounds of cacao seeds at a cost of $2.95 per pound and 4 pounds of cane sugar at $.50 per pound. 3. Desired inventory levels: Type of Inventory May 1 June 1 July 1 August 1 PremiumChoco (pounds) 7,000 8,000 15,000 18,000 cacao seeds (pounds) 6,000 9,000 10,000 13,000 cane sugar (pounds) 5,000 14,000 20,000 25,000

10b) If income was to decrease by 40%, what will be the most likely effect on net income