The income statement for Silver Inc. presented below shows the operating results for the fiscal year just ended. Silver had sales of 1,800 tons of product during that year. The manufacturing capacity of Silvers facilities is 3,000 tons of product.

Revenues		900,000
Variable costs:
Manufacturing	315,000
Non-manufacturing	180,000	495,000
Contribution margin		405,000
Fixed costs:
Manufacturing	90,000
Non-manufacturing	157,500	247,500
Operating income		157,500
Income taxes (40%)		63,000
Net income		94,500

REQUIRED:

1. If the sales volume is estimated to be 2,100 tons for next year, and if the selling price and cost-behaviour patterns remain the same next year, how much net income does Silver expect to earn next year?

2. Assume Silver estimates the selling price per ton will decline 10% next year, total variable cost will increase by 40 per ton, and total fixed costs will not change. Compute how many tons must be sold next year to earn net income of 94,500.