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The condensed income statement for the Kimberly and Gary partnership for 2022 is as follows: A cost behavior analysis indicates that 75% of the cost
The condensed income statement for the Kimberly and Gary partnership for 2022 is as follows: A cost behavior analysis indicates that 75% of the cost of goods sold are variable and 40% of the selling expenses are variable Administrative expenses are $116,550 fixed. Kimberly has proposed a plan to get the partnership "out of the red" and improve its profitability. She feels that the quality of the product could be substantially improved by spending $0.32 more per unit on better raw materials. The selling price per unit could be increased to only $5.25 because of competitive pressures. Kimberly estimates that sales volume will increas by 25%. Compute the net income under Kimberly's proposal and the break-even point in dollars. (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to 2 decimal places, es. 15.25.)
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