B)Step 1
Required net income =current year net income(1+%increase)
=248000(1+.10)
=248000*1.1
=$ 272800
Step 2:
Cost of goods sold expected=current year cost of goods sold(1-%Decrease)
1120000(1-.01)
1120000*.99
1108800
Step 3)Expected selling and administrative expense =Gross profit - expected net income
491200-272800
218400
CAMPBELL CORPORATION Proforma income statement |
|
Sales revenue | 1600000 |
Less cost of goods sold | 1108800 |
Gross profit | 491200 |
Selling and administrative expense | 218400 |
Net income |
272800 |
Reduction in selling and administrative expense(232000-218400) | 13600 |
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