The company has developed a target budget for selling 50,000 units in the upcoming year. The estimated budget is to sell 40,000 golf shirts and 10,000 pairs of shoes. Therefore the sales mix is 4 golf shirts for every pair of golf shoes sold. No fixed expenses are assigned to either golf shirts or golf shoes. As long as the company keeps selling golf shirts and shoes, the fixed expenses will not change therefore they are deducted in total rather than allocated to the individual product lines. The forecasted income statement is listed below. S GolfPro Center Forecasted Income Statement For the year ended 2017 Total Golf Shirts Per Unit Golf Shoes Percentage Total Per Unit Percentage Total Company Total Percentage Sales $800,000 $20.00 100% $450,000 $45.00 100% $1,250,000 100% Cost of goods sold 592,000 14.80 74% 360,000 36.00 80% 952,000 76.16% Sales commission 48,000 1.20 6% 27,000 2.70 6% 75,000 6% Variable expenses 640,000 16.00 80% 387,000 38.70 86% 1,027,000 82.16% Contribution margin 160,000 4.00 20% 63,000 6.30 14% 223,000 17.84% Selling and marketing 125,000 Administrative expense 53,400 Fixed expense 178,400 Operating income 40000 10000 Golf Shirts Golf Shoes Sales Price $20.00 $45.00 Cost of goods sold 14.80 36.00 Sales Commission 1.20 2.70 Total Variable expenses 16.00 38.70 Contribution Margin $4.00 $6.30 44,600