Palm-West Products (A) The company's yearly operating expenses (organized by cost behavior) are provided in Exhibit 2. For simplicity, the company assumes that all operating expenses are paid in cash during the year incurred, with the exception of depreciation and insurance expense. To simplify, assume no tax consequences. Unit Sales 2007 Total BASE PREMIUM Forecasted Sales Volume 2006 2008 11,400 12,700 7,956 8,550 9,017 2,244 2,850 3,683 225 Sales Price BASE PREMIUM 221 365 216 358 372 Unit Cost BASE PREMIUM 155 225 155 225 u Exhibit 1. PWP's sales forecast and other sales information Variable: Sales commissions (% of sales dollars) Shipping & handling (per unit sold) 5% of sales $15 per unit Fixed: Wages and salaries Rent Utilities Insurance expired Depreciation Other S&A Exhibit 2. PWP's planned operating expenses per year. (per year) 315,000 26,000 9,500 4,500 16,000 38,000 Requirements Prepare the following Income Statements for 2006, assuming: Palm-West Products (A) 1. Actual sales were as given in Exhibit 1. 2. Actual sales were 65 percent WIND-B and 35 percent WIND-P