Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 40,000 units of each product. Sales and costs for each product follow.

	Product T					Product O
Sales		$	720,000				$	720,000
Variable costs			576,000					144,000
Contribution margin			144,000					576,000
Fixed costs			34,000					466,000
Income before taxes			110,000					110,000
Income taxes (32% rate)			35,200					35,200
Net income		$	74,800				$	74,800

2. Assume that the company expects sales of each product to decline to 23,000 units next year with no change in unit selling price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as just shown with columns for each of the two products (assume a 32% tax rate). Also, assume that any loss before taxes yields a 32% tax benefit. (Round "per unit" answers to 2 decimal places. Enter losses and tax benefits, if any, as negative values.)

3. Assume that the company expects sales of each product to increase to 54,000 units next year with no change in unit selling price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32% tax rate). (Round "per unit" answers to 2 decimal places.)