Walton Company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and budgeted annual income statements for each of the products follow. ok) moes Budgeted sales in units (a) Expected sales price (b) Variable costs per unit (c) Income statements Sales revenue (axb) Variable costs (ax) Contribution margin Fixed costs het income Relevant Information Skin Cream 130,000 Bath OLL 218,000 Color Gel $ 10 1 $ 98,000 16 10 $1,300,000 $1,962,000 (276,000) (872,0)) $1,568,000 (960,000) 1,104,000 (912,000) 1,000,000 (950,000) $ 192,000 $ 140,000 588,000 (198,000) $ 300,000 Required: a. Determine the margin of safety as a percentage for each product b. Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. c1. For each product, determine the percentage change in net income that results from the 20 percent increase in sales c2. Which product has the highest operating leverage? d. Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? e. Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line Complete this question by entering your answers in the tabs below. Req A Req B ReqC1 Red C2 to Determine the margin of safety as a percentage for each product. (Round your answers to whole percentage values.) < Prev 8 of 16 Next >