Ross and Co. is considering a proposal to manufacture windows for use in mobile trailers. The windows sell for an average of $125 and they expect to sell 5,000 units per year. Variable costs are 48% and fixed costs are $175,000.

Required:

1. Prepare the base case income statement.
2. Calculate the sensitivity of net income assuming a +/- 12% change in unit sales.
3. Calculate the sensitivity of net income assuming a +/- 8% change in sales price.