SALES REVENUE (5500 UNITS) MANUFACTURING COSTS MATERIALS $ 143,000.00 VARIABLE COSTS $ 66,000.00 FIXED COST $ 150,000.00 DEPRECIATION $ 168,000.00 TOTAL MFG COST $ 527,000.00 $ 16,500.00 MARKETING AND ADMINISTRATION COSTS: VARIABLE MARKETING COSTS MARKETING DEPRECIATION ADMINISTRATIVE FIXED COST ADMINISTRATIVE DEPRECIATION $ 32,500.00 $ 55,600.00 $ 13,500.00 TOTAL MKT AND ADMIN $ 118,100.00 TOTAL COST $ 645,100.00 OPERATING PROFITS $ 372,400,00 DEPRECIATION CHARGES ARE FIXED, A NEW ASSET COSTING 33K WILL BE ADDED 3 YEAR LIFE AND 3K SALVAGE VALUE. (S.L. DEPRECIATION) SALES VOLUME WILL INCREASE BY 7 1/2 PERCENT, AND SALES PRICE WILL INCREASE BY 4 PERCENT CHANGE IN MATERIAL WILL LOWER ITS COST 4 PERCENT VARIABLE MARKETING COST WILL DECREASE 3 PERCENT A MACHINE IN ADMINISTRATION WITH YEARLY DEPRECIATION OF 6K WILL BE SCRAPPED WITH NO BOOK VALUE LEFT. ADMINISTRATIVE FIXED COST WILL INCREASE 8 PERCENT. MARKETING DEPARMENT ADDS A MACHINE FOR 18K, 3 YEAR LIFE AND SALVAGE VALUE 3k. PREPARE A NEW FORECASTED INCOME STATEMENT REFLECTING THE ABOVE CHANGES $ 1,017,500.00