Q. 1. Prepare a budgeted income statement for Oven-Safe Classic for 2017 if the engineers' redesign efforts had worked as originally planned. Use these assumptions: . . First quarter sales of 1,500,000 units will be achieved each quarter in 2017. b. The selling price for 2017 will remain 11% below the price charged from 2012-2016, and there were no sales price increases during the 2012-2016 period. c. The variable cost of goods sold averaged about $5.55 per unit of ovenware from 2012-2016. d. Variable production costs will be reduced by 36% due to the new design. e. The fixed cost of production in 2016 contained one-time, increased costs (about $4,000,000 ) for the design changes. For 2017 , fixed costs are expected to be about 3.6% higher than in 2015. r. Marketing costs contain both fixed and variable elements, however, it is budgeted based on spending 7.1% of expected sales revenue. 8. Other fixed costs are expected to increase about 2.6% over 2016. Would the product manager have met his profit target of 25% return on sales in 2017 for the product line with the redesign? EXHIBIT ONE Green Cast, Inc. Oven-Safe Classic Product Income Statement For the years ended December 31, 2012-2016