Style Right Company makes hair dryers. During the past few days, its accountants have been preparing the master budget for the coming year, 2000. To date, they have gathered the following projected data:

Required: 1. Prepare a pro-forma income statement (contribution margin approach) and balance sheet for the coming year. Any income taxes owed on the coming year's net income will be paid the following year.
2. By approximately how much would Style Right's profits increase if another 3,000 units were produced and sold for $\$ 20$ each?

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Sales revenue (at $20 per unit). $281,750 Variable selling expenses.... Variable administrative expenses.. 17,250 40,250 Interest expense (not included in selling and administrative expenses) 1,725 Cost of goods sold (includes only variable costs). 103,500 Ending cash balance 30,475 Ending accounts receivable balance.. 47,150 Ending land balance 24,150 Ending buildings balance. 71,300 Ending equipment balance... 24,150 Ending accumulated depreciation-buildings balance..... Ending accumulated depreciation-equipment balance... Ending direct materials inventory balance.... 47,150 9,200 16,100 Ending finished goods inventory balance... 25,300 Ending accounts payable balance. 6,900 Ending common stock balance.. 32,200 Retained earnings balance, January 1 64,050 Balance in paid-in capital in excess of par account. 23,000 Fixed selling expenses...... 23,000 Fixed administrative expenses. 28,750 Fixed manufacturing overhead... 11,150 Income tax rate. 35%