Mystique Manufacturing Had Sales Revenue Last Year of $450,000, Variable

Essay

Mystique Manufacturing had sales revenue last year of $450,000, variable manufacturing costs of $135,000, and fixed manufacturing costs of $60,000.
a) If Mystique expects sales revenues to increase by 20% for the upcoming year, with variable manufacturing costs maintaining the same percentage relationship to sales revenue as in the previous year, with the same fixed manufacturing costs, what will the expected net income (profit) be for Mystique in the upcoming year?
b) If Mystique expects sales revenues to decrease by 20% for the upcoming year, with variable manufacturing costs maintaining the same percentage relationship to sales revenue as in the previous year, with the same fixed manufacturing costs, what will the expected net income (profit) be for Mystique in the upcoming year?